An in-depth look at the Cleveland Industrial market. Analysis includes leasing, sales, construction and employment.

1. JLL Research
Cleveland | Q1 2018
Industrial Outlook
An in-depth look at the Cleveland industrial
market. Analysis includes leasing, sales,
construction and employment.

2. Q1 2018
Insight
Cleveland Industrial Outlook
Conditions in the Cleveland industrial market are incredibly tight with vacancy
sitting at just 5.4 percent. Conditions are even tighter within the premium
modern bulk segment (defined in Cleveland as buildings ≥75,000 square feet,
built in 2000 or later, with ≥24’ clear heights and ESFR). Within this top-tier
segment, vacancy sits at a mere 2.0 percent. Business expansion remains
prevalent across the region, and many companies are unable to find existing
properties that meet their needs. This has led to an escalation of
development activity as businesses look to build custom facilities tailored to
their unique operations. More than 3.0 million square feet of new product is
currently under construction. That is on top of the 400,000 square feet already
delivered this year and another 1.8 million square feet that is planned.
The majority of these developments have been owner-user or built-to-suit in
nature, with only a small percentage being speculative. However, those recent
speculative developments have seen very high levels of leasing, thus
persuading developers to move forward this year on several speculative
warehouses. Another motivating factor for developers is the rent growth that
the market has seen in recent years. The average asking rent for modern bulk
warehouse space is approaching $6.00 per square foot, an increase of 17.6
percent over the last five years.
Outlook
Construction will continue at a fever pitch through 2018 as companies remain
in expansion mode and developers test the market with additional
speculative product. Development activity will be concentrated in
communities that offer friendly tax incentive packages, including real estate
and income tax abatement. A few communities who have been active in this
area are Glenwillow, Strongsville and Twinsburg. Rents will likely increase
another 5.0 percent this year as the market remains incredibly tight. Sales
activity in 2018 might not reach the levels seen in 2017 and 2016, however, it is
sure to be well above historical averages.
Fundamentals Forecast
YTD net absorption 2,478,938 s.f. ▲
Under construction 3,030,000 s.f. ▶
Deliveries 395,000 s.f. ▲
Total vacancy 5.4% ▼
Average asking rent (NNN) $4.28 p.s.f. ▲
Tenant improvements Falling ▼
Demand remains unabated, construction levels soar
Top trends
• Market conditions are incredibly tight with vacancy at 5.4 percent.
Modern bulk vacancy is sitting at a mere 2.0 percent.
• Business expansion remains prevalent across the region. More than 3.0
million square feet is under construction, another 1.8 million planned.
• The average asking rent for modern bulk is approaching $6.00 per
square foot, an increase of 17.6 percent over the last five years.
0
1,000,000
2,000,000
3,000,000
4,000,000
2014 2015 2016 2017 Q1 2018
Supply and demand (s.f.) Net absorption
Deliveries
6.8%
6.6%
6.3%
6.0%
5.4%
2014 2015 2016 2017 Q1 2018
Total vacancy
$3.00
$3.50
$4.00
$4.50
2014 2015 2016 2017 Q1 2018
Average asking rents ($/s.f.)
W&D Manufacturing
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

3. Q1 2018
Statistics
Cleveland Industrial Outlook
The property set was updated to reflect the latest market dynamics, including the removal of functionally obsolete properties and the addition of recently completed developments.
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Inventory
(s.f.)
YTD
absorption
(s.f.)
YTD
absorption
(% of stock)
Total
availability
(s.f.)
Total
availability
(%)
Average
asking rent
($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Cleveland Totals
Warehouse & Distribution 208,400,810 1,335,042 0.6% 12,749,711 6.1% $4.38 120,000 2,693,000
Manufacturing 147,471,647 1,143,896 0.8% 6,516,579 4.4% $4.03 130,000 303,000
Totals 355,872,457 2,478,938 0.7% 19,266,290 5.4% $4.28 250,000 2,996,000
Flex 22,015,586 292,683 1.3% 1,887,349 8.6% $9.18 145,000 34,000
Downtown
Warehouse & Distribution 21,282,111 389,615 1.8% 1,216,002 5.7% $3.12 0 0
Manufacturing 15,193,766 350,271 2.3% 394,179 2.6% $4.84 0 0
Totals 36,475,877 739,886 2.0% 1,610,181 4.4% $3.54 0 0
Flex 1,128,784 11,095 1.0% 12,289 1.1% $14.82 0 0
East
Warehouse & Distribution 2,093,718 12,428 0.6% 136,263 6.5% $6.51 0 0
Manufacturing 1,963,140 0 0.0% 65,703 3.3% $5.17 0 0
Totals 4,056,858 12,428 0.3% 201,966 5.0% $6.07 0 0
Flex 1,856,639 -25,145 -1.4% 203,252 10.9% $8.64 145,000 0
Medina County
Warehouse & Distribution 12,322,060 255,017 2.1% 332,655 2.7% $4.36 0 107,000
Manufacturing 6,166,346 99,317 1.6% 228,078 3.7% $4.64 0 0
Totals 18,488,406 354,334 1.9% 560,733 3.0% $4.47 0 107,000
Flex 1,282,323 101,624 7.9% 81,720 6.4% $8.00 0 0
Northeast
Warehouse & Distribution 27,740,803 179,256 0.6% 1,529,137 5.5% $3.55 0 1,106,000
Manufacturing 30,691,032 -166,720 -0.5% 1,348,218 4.4% $4.04 0 130,000
Totals 58,431,835 12,536 0.0% 2,877,355 4.9% $3.78 0 1,236,000
Flex 1,741,518 13,482 0.8% 88,700 5.1% $9.82 0 0
South
Warehouse & Distribution 14,328,160 187,940 1.3% 1,072,212 7.5% $4.75 50,000 0
Manufacturing 10,325,524 7,806 0.1% 426,249 4.1% $3.61 0 0
Totals 24,653,684 195,746 0.8% 1,498,461 6.1% $4.43 50,000 0
Flex 3,661,050 34,958 1.0% 383,670 10.5% $9.92 0 0
Southeast
Warehouse & Distribution 48,914,935 -93,223 -0.2% 3,412,412 7.0% $4.80 70,000 1,480,000
Manufacturing 20,588,644 159,083 0.8% 943,838 4.6% $4.51 130,000 0
Totals 69,503,579 65,860 0.1% 4,356,250 6.3% $4.74 200,000 1,480,000
Flex 6,088,068 68,486 1.1% 746,804 12.3% $8.91 0 0
Southwest
Warehouse & Distribution 21,964,268 219,680 1.0% 2,310,391 10.5% $4.25 0 0
Manufacturing 17,202,734 -36,152 -0.2% 974,590 5.7% $3.86 0 125,000
Totals 39,167,002 183,528 0.5% 3,284,981 8.4% $4.13 0 125,000
Flex 2,893,290 8,420 0.3% 150,751 5.2% $7.50 0 0
Summit County
Warehouse & Distribution 36,567,308 162,230 0.4% 1,327,826 3.6% $4.39 0 0
Manufacturing 22,883,688 671,358 2.9% 1,555,884 6.8% $3.70 0 48,000
Totals 59,450,996 833,588 1.4% 2,883,710 4.9% $4.02 0 48,000
Flex 2,387,774 39,413 1.7% 177,973 7.5% $9.50 0 34,000
West
Warehouse & Distribution 22,811,202 -23,700 -0.1% 1,310,462 5.7% $3.89 0 0
Manufacturing 23,074,536 20,923 0.1% 590,630 2.6% $3.91 0 0
Totals 45,885,738 -2,777 0.0% 1,901,092 4.1% $3.90 0 0
Flex 1,014,735 48,500 4.8% 47,851 4.7% $8.77 0 0

4. Q1 2018
Construction
Cleveland Industrial Outlook
3
1
5
4
6
2
This map highlights a partial list of construction projects either planned, under construction, or recently completed.
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
1
Address: 1260 Babbitt Rd
Building size: 650,000
Percent leased: 100%
Tenant(s): Amazon
Owner: Seefried
Construction type: BTS
Est. completion: Q2 2019
2
Address: 26250 Bluestone
Building size: 75,000
Percent leased: 0%
Tenant(s): N/A
Owner: Fogg
Construction type: Spec
Est. completion: Q3 2018
3
Address: 20900 Emery Rd
Building size: 850,000
Percent leased: 100%
Tenant(s): Amazon
Owner: Seefried
Construction type: BTS
Est. completion: Q4 2018
4
Address: 31100 Diamond Pky
Building size: 130,000
Percent leased: 100%
Tenant(s): GED Solutions
Owner: ORG
Construction type: BTS
Completion: Q1 2018
5
Address: 8701 Chamberlin
Building size: 404,000
Percent leased: 100%
Tenant(s): O'Reilly's
Owner: Scannell
Construction type: BTS
Est. completion: Q3 2019
6
Address: 1200 S Chillicothe
Building size: 409,000
Percent leased: 100%
Tenant(s): McMaster-Carr
Owner: Scannell
Construction type: BTS
Est. completion: Q4 2018

5. Q1 2018
Sales
Cleveland Industrial Outlook
This dashboard analyzes all industrial sales completed within the last 12 months ≥$1,000,000 and ≥30,000 s.f.
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Top 10 sales transactions during the last 12 months
Size (s.f.) $ p.s.f. Sale date
554,037 $72 Aug-17
1,212,782 $25 May-17
219,765 $89 Sep-17
212,000 $68 Mar-18
138,148 $72 Sep-17
190,188 $37 Jun-17
115,000 $58 Oct-17
100,040 $66 Jul-17
122,024 $53 Oct-17
198,060 $32 Apr-17
$6,600,000
$6,500,000Boltun United Real Estate Geis Companies
777 Lena Drive
7201 Industrial Park Boulevard STORE Capital Corporation Wiseco Piston Company
$6,400,000
4600 Prosper Drive
Industrial Realty GroupPiping Rock Health Products
$10,000,000
Three building portfolio CDH Investments Gatehouse Bank $6,722,204
First Industrial Realty Trust $7,000,000
30 Foundation Place AIC Ventures Daniel L Pohl Family
30600 Carter Street Kanan Enterprises
4651 Prosper Road Monmouth Real Estate Investment Geis Companies
Five building portfolio
Fourteen building portfolio Brennan Investment Group Arch Street Capital Advisors $14,441,686
$30,510,186
$19,500,000
Raith Capital Partners SB Equities
12850-13000 Darice Parkway Vereit AIC Ventures $40,000,000
Seller company Sales price
Average price per square footSales volume by submarket (s.f.)
Building address Buyer company
12 months at a glance Sales volume by building type
Total volume ($) $284,853,075
Total volume (s.f.)
Number of owner-user sales 45
Transactions details
8,589,520
Number of transactions 63
Number of investment sales 17
Number of sale-leasebacks 1
0 1,000,000 2,000,000 3,000,000
West
Summit
Southwest
Southeast
South
Northeast
Medina
East
Downtown
0
1,500,000
3,000,000
4,500,000
6,000,000
7,500,000
9,000,000
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
Warehouse / Distribution Manufacturing Flex
Total volume ($) Total volume (s.f.)
$0
$25
$50
$75
Warehouse / Distribution Manufacturing Flex

6. Q1 2018
Employment
Cleveland Industrial Outlook
4.1%U.S. unemployment
1.7%U.S. 12-month job growth
5.6%Cleveland unemployment
0.1%Cleveland 12-month job growth
4.7%Ohio unemployment
0.4%Ohio 12-month job growth
-0.5%
0.2%
0.9%
1.6%
2.3%
3.0%
2013 2014 2015 2016 2017 2018
Cleveland U.S.
3,800
1,800
400
200
100
-100
-200
-800
-1,600
-2,600
-4,800 -3,800 -2,800 -1,800 -800 200 1,200 2,200 3,200 4,200
Manufacturing
Trade, Transportation & Utilities
Financial Activities
Educational & Health Services
Government
Information
Other Services
Mining, Logging & Construction
Professional & Business Services
Leisure & Hospitality
-5.0
0.0
5.0
10.0
2013 2014 2015 2016 2017 2018
Trade,Transportation & Utilities Manufacturing
Other Services Mining, Logging & Construction
0%
4%
8%
12%
900,000
1,000,000
1,100,000
2013 2014 2015 2016 2017 2018
Employment Unemployment
Employment vs. unemployment rate
Employment by industry
Job growth (12-month change)
19%
18%
14%13%
12%
9%
7%
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Other Services
Mining, Logging & Construction
Information
Industrial employment trends (12-month change, 000s)
Job growth by sector (12-month change)
These charts display the latest economic data available from the Bureau of Labor Statistics as of March 2018
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

7. About JLL
JLL (NYSE: JLL) is a leading professional services firm that
specializes in real estate and investment management. A
Fortune 500 company, JLL helps real estate owners,
occupiers and investors achieve their business ambitions. In
2017, JLL had revenue of $7.9 billion and fee revenue of $6.7
billion; managed 4.6 billion square feet; and completed
investment sales, acquisitions and finance transactions of
approximately $170 billion. At the end of 2017, JLL had
nearly 300 corporate offices, operations in over 80 countries
and a global workforce of 82,000. As of December 31, 2017,
LaSalle had $58.1 billion of real estate assets under
management. JLL is the brand name, and a registered
trademark, of Jones Lang LaSalle Incorporated. For further
information, visit www.jll.com.
About JLL Research
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+ 1 216 937 4394
brian.conroy@am.jll.com
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Managing Director
+ 1 216 937 4384
scott.pick@am.jll.com
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+1 216 937 4379
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Vice President, Director of Research
+1 216 937 4374
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© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.