Office-using employment sectors have experienced sustained employment expansion over the last year, recording an annualized net gain of 3,100 jobs across the metro. Employment gains were led by the professional and business services sector, which added 1,500 jobs year-over-year.

1. Office real estate implications
Sources: JLL Research, Bureau of Labor Statistics
Job growth/loss by sector (12-month change)
Cleveland
-2,300
-1,700
0
700
900
1,200
1,500
2,200
2,800
10,000
-4,000 0 4,000 8,000 12,000
Trade, Transportation & Utilities
Mining, Logging & Construction
Information
Government
Financial Activities
Manufacturing
Professional & Business Services
Other Services
Educational & Health Services
Leisure & Hospitality
Number of Jobs
Rightsizing is top of mind for many of Cleveland’s office tenants. A move
towards open floor plans with numerous breakout rooms and collaboration
spaces is also a prevailing trend. As such, the market is seeing more
relocations than renewals. And landlords are providing competitive
improvement allowances for tenants to outfit their new space. Built-to-suit
activity is also on the rise. Companies such as Eaton, American Greetings and
Omnova have all gone this route. In this case, occupiers are able to start with
a blank canvas and create an environment tailored to their individual corporate
culture.
Tenants are demanding newer office product. Many are finding it difficult to
outfit aging offices with modern technology infrastructure and many older
offices do not sync with the sustainability initiatives of today’s corporates.
While tenants will pay a premium for new product, the benefits of large floor
plates, energy efficient offices and modern technology infrastructure outweigh
the rent premium in the eyes of most corporate occupiers.
Total jobs vs. unemployment rate
Cleveland
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
850,000
900,000
950,000
1,000,000
1,050,000
1,100,000
2000 2002 2004 2006 2008 2010 2012 2014
Peak: 1,080,614 jobs
2.2%
unemployment rate
total jobs
Office employment trends (12-month change)
Cleveland
Office employment update
Metro Cleveland . April 2015
6.4%Cleveland unemployment
1.5%Cleveland 12-month job growth
5.5%U.S. unemployment
2.3%U.S. 12-month job growth
• According to the most recent estimates from the BLS, total non-
farm employment in Cleveland stood at ~1.0 million payrolls,
representing an annualized increase of 15,300 jobs or 1.5 percent.
Meanwhile, unemployment decreased 120 basis points year-over-
year to 6.4 percent.
• Office-using employment sectors have experienced sustained
employment expansion over the last year, recording an annualized
net gain of 3,100 jobs across the metro. Employment gains were led
by the professional and business services sector, which added
1,500 jobs year-over-year.
• Total U.S. nonfarm employment increased by 126,000 jobs in
March, the lowest level since March 2013 and well below economist
forecasts of 244,000 jobs. Downward revisions were also made to
the January and February figures, totaling 69,000 jobs.
• U.S. unemployment was unchanged at 5.5 percent and wage
growth remained sluggish as average hourly earnings increased
only 2.1 percent year-over-year, far below the Fed’s goal of 3.5
percent or better.
-15.0
-10.0
-5.0
0.0
5.0
10.0
2010
2011
2012
2013
2014
2015
Financial Activities Professional & Business Services Information Government

2. JLL Americas Research • Cleveland Office Employment Update 2
February 2013 February 2014 February 2015
Total Non-farm
Employment
1,004,800
1.0%
1,012,100
0.7%
1,027,400
1.5%
Unemployment Rate 7.6% 7.6% 6.4%
Cleveland Supersectors February 2013 February 2014 February 2015
Mining, Logging & Construction 29,700 1.4% 30,200 1.7% 28,500 -5.6%
Manufacturing 123,700 1.1% 123,400 -0.2% 124,600 1.0%
Trade, Transportation, & Utilities 177,200 0.5% 178,800 0.9% 176,500 -1.3%
Information 15,000 -2.0% 14,600 -2.7% 14,600 0.0%
Financial Activities 62,500 1.1% 64,300 2.9% 65,200 1.4%
Professional & Business Services 139,600 0.7% 143,500 2.8% 145,000 1.0%
Educational & Health Services 195,900 1.8% 194,900 -0.5% 197,700 1.4%
Leisure & Hospitality 88,000 6.4% 89,700 1.9% 99,700 11.1%
Other Services 39,100 -1.8% 39,200 0.3% 41,400 5.6%
Government 134,100 -1.3% 133,500 -0.4% 134,200 0.5%
News on the street
Cleveland businesses expanding, contracting, etc.
Benesch Ι Legal Services: Relocating
Leaders at the Benesch law firm have reached an agreement with developer Stark Enterprises to occupy roughly 66,500 square feet at a new office building that will
be part of a $430 million proposed nuCLEus project that could include a 54-story tower, largely filled with apartments; a bridge-like hotel; stores; restaurants; and
parking garages. The Benesch deal marks the first tenant commitment to nuCLEus, an ambitious undertaking by Stark and J-Dek Investments of Solon.
Cordell & Cordell Ι Legal Services: Expansion
Cordell & Cordell, a law firm that focuses on representing men in family law cases, has opened an office in Cleveland. The Cleveland office, located downtown at
600 Superior Avenue, “will broaden the opportunities for divorcing dads to gain information and counsel,” the company said in a news release. Cordell & Cordell said
it has more than 170 attorneys working in 105 offices in 31 states nationwide.
Forest City Enterprises Ι Commercial Real Estate: REIT Conversion
Forest City Enterprises (NYSE:FCE.A) still aims to sell or shed a partial stake in a handful of properties, including most of its Cleveland buildings, as the company
readies to become a real estate investment trust (REIT). The company announced in January that it plans to transform its corporate structure, in a move that will
help keep its tax burden low. The $8.8 billion real estate business expects to transform from a C-Corp into a REIT on Jan. 1, 2016.
K&D Group Ι Commercial Real Estate: Acquisition
The 21-story Keith Building is the latest downtown Cleveland office building to become part of Willoughby-based apartment owner and developer K&D Group’s
portfolio. Unlike K&D’s other office deals last year, the Halle and Leader buildings, Keith will remain an office building. Through 1621 Keith LLC, K&D on March 24
paid $5.2 million for a place to try to put office tenants from Halle and Leader.
North Point Properties Ι Commercial Real Estate: Acquisition
Rockwood Center, located at 6505 Rockside Road in Independence, was recently acquired for $2.5 million ($76 per square foot) by North Point Properties of
Cleveland from an affiliate of Omni Property Companies of Warrensville Heights. Daniel Dzina, president of North Point Properties, said he plans to locate his
commercial real estate firm on the first floor of Rockwood. The 32,000-square-foot building was 97 percent occupied at the time of sale.
Spero-Smith Investment Advisers Ι Asset Management: Expanding
Spero-Smith Investment Advisers, one of the largest independent investment management firms in Northeast Ohio, has relocated its operations from Beachwood to
8,000 square feet on the 27th floor of Terminal Tower in downtown Cleveland. The company comprises 13 employees today, but will be hiring another two or three
additional staff in the coming months, according to a statement from the company’s president and chief operating officer, Jeffrey Malbasa.
Employment statistics
Cleveland
Industry employment stratification
Cleveland
Educational &
Health Services,
197,700, 19%
Trade, Transportation
& Utilities,
176,500, 17%
Professional &
Business Services,
145,000, 14%
Government,
134,200, 13%
Manufacturing,
124,600 , 12%
Leisure & Hospitality,
99,700, 10%
Financial Activities,
65,200 , 6%
Other Services,
41,400, 4%
Mining, Logging &
Construction,
28,500, 3% Information,
14,600, 1%
Andrew Batson
Senior Research Analyst
Great Lakes Region
tel +1 216 937 4374
Andrew.Batson@am.jll.com
127 Public Square,
Suite 2410
Cleveland, OH 44114
www.jll.com/cleveland
Robert Kramp
Senior Vice President – Americas
Midwest & Great Lakes Research Director
tel +1 312 228 2470
Robert.Kramp@am.jll.com
200 East Randolph Street,
47th Floor
Chicago, IL 60601
www.us.joneslanglasalle.com/research
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reliable; however, no representation or warranty is made
to the accuracy thereof.