Office-using employment sectors have experienced sustained, albeit modest employment expansion over the last year, recording an annualized net gain of 3,200 jobs across the metro.

1. Office real estate implications
Sources: JLL Research, Bureau of Labor Statistics
Job growth/loss by sector (12-month change)
Cleveland
-2,100
-1,600
100
700
1,000
1,000
1,200
1,400
3,500
9,100
-4,000 0 4,000 8,000 12,000
Trade, Transportation & Utilities
Mining, Logging & Construction
Information
Government
Manufacturing
Financial Activities
Other Services
Professional & Business 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 . May 2015
5.7%Cleveland unemployment
1.4%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 14,300 jobs or 1.4 percent.
Meanwhile, unemployment decreased 100 basis points year-over-
year to 5.7 percent.
• Office-using employment sectors have experienced sustained,
albeit modest employment expansion over the last year, recording
an annualized net gain of 3,200 jobs across the metro. Employment
gains were led by the professional and business services sector,
which added 1,400 jobs year-over-year.
• Total U.S. nonfarm employment increased by 223,000 jobs in April,
a healthy uptick after a disappointing March where job gains totaled
just 85,000. The strong April results will help lower concerns among
economists and Wall Street of a hiring slowdown.
• U.S. unemployment decreased 10 basis points to 5.4 percent, its
lowest mark since May 2008. Wages also continued to trend in the
right direction in April, increasing 2.2 percent year-over-year. -10.0
-5.0
0.0
5.0
10.0
2011
2012
2013
2014
2015
Professional & Business Services Information Government Financial Activities

2. JLL Americas Research • Cleveland Office Employment Update 2
March 2013 March 2014 March 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 March 2013 March 2014 March 2015
Mining, Logging & Construction 30,400 0.0% 31,500 3.6% 29,900 -5.1%
Manufacturing 123,900 0.7% 123,600 -0.2% 124,600 0.8%
Trade, Transportation, & Utilities 177,800 0.0% 178,800 0.6% 176,700 -1.2%
Information 15,000 -2.0% 14,600 -2.7% 14,700 0.7%
Financial Activities 62,400 0.8% 64,500 3.4% 65,500 1.6%
Professional & Business Services 141,300 0.9% 144,300 2.1% 145,700 1.0%
Educational & Health Services 195,900 1.8% 195,600 -0.2% 199,100 1.8%
Leisure & Hospitality 90,300 5.7% 91,900 1.8% 101,000 9.9%
Other Services 39,200 -2.2% 39,300 0.3% 40,500 3.1%
Government 133,700 -2.0% 133,500 -0.1% 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.
Duke Realty Ι Commercial Real Estate: Disposition
On the April 30 conference call, Denny Oklak, Duke chairman and CEO said the publicly traded national realty developer “closed $161 million of dispositions during
the quarter, including transactions that represented the completion of our exit from the Cleveland office market.” At its height, Duke had 23 office buildings totaling
2.2 million square feet and 11 industrial buildings totaling 2.0 million square feet in northeast Ohio.
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.
Penton Media Ι Magazine Publishers: Relocation
Penton Media, the namesake company at the Penton Media Building since 2000, has inked a lease to move into a single floor at 1100 Superior Avenue, now called
Oswald Centre. Penton will occupy the eighth floor of Oswald, the former offices of the Ostendorf-Morris brokerage firm, which moved to the U.S. Bank building at
the end of 2014 when it merged with Hanna Chartwell. Penton landed in about 28,000 square feet at Oswald after searching throughout the downtown market.
Republican National Committee Ι Political Action Committee: Expanding
40,000 square feet on Halle’s fourth floor will be the home for the Republican National Committee as it prepares for its 2016 national convention in Cleveland,
according to Doug Price, whose K&D Group owns the onetime department store at 1228 Euclid Ave. Price, CEO and co-owner of Willoughby-based K&D, said the
RNC will primarily pay for its utilities and will not pay a market rent. He said he and K&D co-owner Karen Paganini consider it a political donation.
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,
199,100, 19%
Trade, Transportation
& Utilities,
176,700, 17%
Professional &
Business Services,
145,700, 14%
Government,
134,200, 13%
Manufacturing,
124,600 , 12%
Leisure & Hospitality,
101,000, 10%
Financial Activities,
65,500 , 6%
Other Services,
40,500, 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
Cody Brooks
Research Analyst
Great Lakes Region
tel +1 513 297 2509
Cody.Brooks@am.jll.com
312 Walnut St,
Suite 3030
Cincinnati, OH 45202
www.jll.com/cincinnati
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