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

1. JLL Research
Cleveland | Q3 2017
Industrial
Outlook
An in-depth look at the
Cleveland industrial
market. Analysis includes
leasing, sales, construction
and employment.

2. © 2017 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.
Q3 2017
Insight
Cleveland Industrial Outlook
Amazon announced plans in the second quarter to open two fulfillment
centers in Cleveland totaling 2.6 million square feet. The commitment from
Amazon represents a significant economic development win for the region, to
the tune of $350.0 million and 3,000 new jobs. Amazon will lease the
warehouses, which will be built and owned by Seefried Industrial Properties.
Interesting, both fulfillment centers will be constructed on sites that once
housed regional malls. The redevelopment of these sites is indicative of the
shift in consumer preferences from traditional retailing to e-commerce.
The first fulfillment center is being constructed on the site of the former
Randall Park Mall. The mall closed in 2009 and was purchased by IRG in 2013.
IRG spent the last four years demolishing the mall and preparing the site for
redevelopment. Seefried recently purchased the property from IRG and
immediately began construction on an 885,000-square-foot warehouse.
Construction is expected to be completed in 2019. The second fulfillment
center will be located on the site of the former Euclid Square Mall. Seefried
has agreements to buy the shuttered mall and surrounding parcels from
multiple owners. Demolition of the site is expected to start later this year. The
Euclid fulfillment center will total 1.7 million square feet and is expected to be
operational in 2019. In a switch from traditional warehouse design, the
building will have three floors. The first floor will have an 18-foot clear height
and the second two floors will house robotic storage with 9-foot clear heights.
Outlook
Amazon's decision will have a positive impact on the long-term outlook for
the Cleveland industrial market, although the benefits may be limited. There
will likely be additional development adjacent to the fulfillment centers, as
auxiliary services look to locate within proximity to Amazon. There are a
number of development-ready sites in Euclid that could support this demand,
while in North Randall, the central location and immediate interstate access
will be attractive to many companies doing business with Amazon.
Amazon makes a significant commitment to Cleveland,
announces two fulfillment centers totaling 2.6 m.s.f.
• The fulfillment centers will be developed on sites that once housed
malls. Evidence of the shift from traditional retailing to e-commerce.
• Seefried Industrial Properties will build and own both warehouses.
Construction is ongoing and should be complete by early 2019.
• Amazon's decision will have a positive impact on the outlook for the
Cleveland industrial market, although the benefits may be limited.
Fundamentals Forecast
YTD net absorption -256,474 s.f. ▲
QTD net absorption 890,814 s.f. ▲
Under construction 2.0 m.s.f. ▶
Total vacancy 8.5% ▼
Average asking rent (NNN) $3.88 p.s.f. ▲
Tenant improvements Falling ▼
-1,000,000
1,000,000
3,000,000
5,000,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
9.6%
8.9%
8.5%
8.2%
8.5%
7.0%
9.0%
11.0%
2013 2014 2015 2016 YTD
2017
Total vacancy
$2.25
$3.25
$4.25
2013 2014 2015 2016 2017
Average asking rents ($/s.f.)
W&D Manufacturing

3. © 2017 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.
Q3 2017
Statistics
Cleveland Industrial Outlook
Inventory
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
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 181,073,426 -770,041 -0.4% 16,354,927 9.0% $4.05 526,310 1,442,000
Manufacturing 154,893,074 513,567 0.3% 12,252,645 7.9% $3.64 417,000 365,000
Totals 335,966,500 -256,474 -0.1% 28,607,572 8.5% $3.88 943,310 1,807,000
Flex 22,712,334 195,894 0.9% 2,819,665 12.4% $9.83 20,000 145,000
Downtown
Warehouse & Distribution 16,826,326 -344,461 -2.0% 2,480,959 14.7% $3.20 46,310 0
Manufacturing 18,764,182 98,722 0.5% 2,908,064 15.5% $3.34 0 0
Totals 35,590,508 -245,739 -0.7% 5,389,023 15.1% $3.28 46,310 0
Flex 1,521,527 132,741 8.7% 154,478 10.2% $14.00 0 0
East
Warehouse & Distribution 1,983,883 8,718 0.4% 110,310 5.6% $6.65 0 0
Manufacturing 1,963,140 -175 0.0% 51,703 2.6% $5.23 0 0
Totals 3,947,023 8,543 0.2% 162,013 4.1% $6.20 0 0
Flex 1,887,113 78,446 4.2% 191,758 10.2% $9.59 0 145,000
Medina County
Warehouse & Distribution 10,863,070 346,013 3.2% 730,806 6.7% $4.58 0 107,000
Manufacturing 6,165,926 277,696 4.5% 196,868 3.2% $4.40 0 0
Totals 17,028,996 623,709 3.7% 927,674 5.4% $4.54 0 107,000
Flex 1,247,708 -10,361 -0.8% 187,896 15.1% $8.00 0 0
Northeast
Warehouse & Distribution 21,621,020 -112,526 -0.5% 1,975,116 9.1% $3.19 0 181,000
Manufacturing 31,732,988 -26,856 -0.1% 2,148,695 6.8% $3.57 70,000 110,000
Totals 53,354,008 -139,382 -0.3% 4,123,811 7.7% $3.39 70,000 291,000
Flex 2,006,693 -73,661 -3.7% 348,599 17.4% $12.52 0 0
South
Warehouse & Distribution 11,902,367 -209,011 -1.8% 1,341,993 11.3% $4.73 0 50,000
Manufacturing 10,325,524 76,242 0.7% 517,832 5.0% $3.80 0 0
Totals 22,227,891 -132,769 -0.6% 1,859,825 8.4% $4.47 0 50,000
Flex 3,655,481 39,278 1.1% 504,121 13.8% $9.70 0 0
Southeast
Warehouse & Distribution 43,010,658 -522,138 -1.2% 3,770,220 8.8% $4.62 146,000 920,000
Manufacturing 20,679,676 241,125 1.2% 896,180 4.3% $4.12 0 130,000
Totals 63,690,334 -281,013 -0.4% 4,666,400 7.3% $4.52 146,000 1,050,000
Flex 6,038,657 -11,669 -0.2% 836,332 13.8% $8.67 0 0
Southwest
Warehouse & Distribution 20,043,724 -839,501 -4.2% 2,323,084 11.6% $3.84 0 0
Manufacturing 17,502,734 -61,176 -0.3% 1,265,455 7.2% $3.99 0 125,000
Totals 37,546,458 -900,677 -2.4% 3,588,539 9.6% $3.89 0 125,000
Flex 2,907,441 64,363 2.2% 142,989 4.9% $10.00 0 0
Summit County
Warehouse & Distribution 35,874,272 231,147 0.6% 2,426,636 6.8% $4.23 334,000 184,000
Manufacturing 24,363,624 -66,434 -0.3% 3,255,756 13.4% $3.67 0 0
Totals 60,237,896 164,713 0.3% 5,682,392 9.4% $3.91 334,000 184,000
Flex 2,601,135 9,779 0.4% 336,753 12.9% $9.23 20,000 0
West
Warehouse & Distribution 19,216,089 650,297 3.4% 1,275,895 6.6% $4.02 0 0
Manufacturing 24,024,511 -27,577 -0.1% 981,992 4.1% $3.02 347,000 0
Totals 43,240,600 622,720 1.4% 2,257,887 5.2% $3.59 347,000 0
Flex 1,082,394 -27,512 -2.5% 124,714 11.5% $9.50 0 0

4. © 2017 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.
Q3 2017
Construction
Cleveland Industrial Outlook
Address: 125 Hudson Crossing
Building Size: 125,000 s.f.
Percent Leased: 100%
Tenant(s): Screen Arts & Others
Owner: Premier Dev.
Speculative
Completed: Q3 2017
Address: 542 Seasons Road
Building size: 114,000 s.f.
Percent Leased: 100%
Tenant(s): Wheel Pros & Others
Owner: Fogg/Brennan
Speculative
Completed: Q1 2017
Address: 4863 Scarlet Lane
Building size: 136,000 s.f.
Percent Leased: 0%
Tenant(s): None
Owner: Fogg/Brennan
Speculative
Est. completion: Q4 2017
Address: 31031 Diamond Parkway
Building Size: 120,000 s.f.
Percent Leased: 100%
Tenant(s): Mantua
Owner: Geis
Build-to-suit
Est. completion: Q1 2018
Address: Warrensville Center Road
Building Size: 855,000 s.f.
Percent Leased: 100%
Tenant(s): Amazon
Owner: Seefried
Build-to-suit
Est. completion: Q1 2019
Address: Noble & Babbitt Roads
Building Size: 1,700,000 s.f.
Percent Leased: 100%
Tenant(s): Amazon
Owner: Seefried
Build-to-suit
Est. completion: Q2 2019

5. © 2017 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.
Q3 2017
Sales
Cleveland Industrial Outlook
This report analyzes all industrial sales completed in the last 12 months ≥$1,000,000 and ≥30,000 s.f.
Top 10 sales transactions during the last 12 months
Size (s.f.) $ p.s.f. Sale date
333,215 $182 Jan-17
Vereit AIC Ventures 554,037 $40,000,000 $72 Aug-17
347,205 $88 Mar-17
1,212,782 $25 May-17
400,000 $47 Oct-16
173,052 $44 Mar-17
190,188 $37 Jun-17
100,040 $66 Jul-17
158,319 $36 Jun-17
Darko 165,460 $5,000,000 $32 Jul-17
Number of owner-user sales 27
Transactions details
12 months at a glance Sales volume by building type
Total volume ($) $277,594,275
Total volume (s.f.) 6,073,505
Number of transactions 43
Number of investment sales 13
Building address Buyer company Seller company Sales price
Average price per square footSales volume by submarket (s.f.)
Number of sale-leasebacks 3
1425 Rockwell Avenue H5 Data Centers ByteGrid $60,675,000
38889 Center Ridge Road LCN Capital Partners Scannell Properties $30,650,000
12850-13000 Darice Parkway
Five building portfolio Raith Capital Partners SB Equities $30,510,186
10010 Aurora-Hudson Road STORE Capital The Step2 Company $18,741,438
26801 Fargo Avenue STAG Industrial ORG Portfolio Management $7,636,651
30600 Carter Street Kanan Enterprises First Industrial Reality Trust $7,000,000
7201 Industrial Park Boulevard STORE Capital Wiseco Piston $6,600,000
7333 Corporate Boulevard Malish JDDC $5,755,500
26401 Richmond Road Waxman Industries
0 1,000,000 2,000,000
West
Summit
Southwest
Southeast
South
Northeast
Medina
East
Downtown
0
1,500,000
3,000,000
4,500,000
$0
$50,000,000
$100,000,000
$150,000,000
Warehouse / Distribution Manufacturing Flex
Total volume ($) Total volume (s.f.)
$0
$50
$100
$150
Warehouse / Distribution Manufacturing Flex

6. © 2017 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.
20%
17%
14%13%
11%
10%
6%
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Mining, Logging & Construction
Other Services
Information
Q3 2017
Employment
Cleveland Industrial Outlook
4.4%U.S. unemployment
1.5%U.S. 12-month job growth
6.6%Cleveland unemployment
1.3%Cleveland 12-month job growth
5.2%Ohio unemployment
0.9%Ohio 12-month job growth
0.0%
0.7%
1.4%
2.1%
2.8%
2013 2014 2015 2016 2017
Cleveland U.S.
-1,900
-700
-200
-100
0
600
700
800
1,700
7,700
-10,000-8,000-6,000-4,000-2,000 0 2,000 4,000 6,000 8,00010,000
Trade, Transportation & Utilities
Leisure & Hospitality
Manufacturing
Professional & Business Services
Information
Mining, Logging & Construction
Government
Other Services
Financial Activities
Educational & Health Services
-5.0
0.0
5.0
10.0
2013 2014 2015 2016 2017
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
Employment Unemployment
Employment vs. unemployment rate
Employment by industry Industrial employment trends (12-month change, 000s)
Job growth by sector (12-month change)
Job growth (12-month change)
Job growth by sector (12-month change)

7. © 2017 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.
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About JLL
JLL (NYSE: JLL) is a leading professional services firm that
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Fortune 500 company, JLL helps real estate owners,
occupiers and investors achieve their business ambitions.
In 2016, JLL had revenue of $6.8 billion and fee revenue of
$5.8 billion and, on behalf of clients, managed 4.4 billion
square feet, or 409 million square meters, and completed
sales acquisitions and finance transactions of
approximately $136 billion. At year-end 2016, JLL had
nearly 300 corporate offices, operations in over 80
countries and a global workforce of more than 77,000. As
of December 31, 2016, LaSalle Investment Management
has $60.1 billion of real estate under asset management.
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