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

1. JLL Research
Cleveland | Q3 2019
Industrial Outlook
An in-depth look at the Cleveland industrial
market. Analysis includes leasing, sales,
construction and employment.

2. Q3 2019
Insight
Cleveland Industrial Outlook
Increasing demand for modern warehouse space continues to build as
industrial projects currently under construction tally 2.4 million square feet. A
third of that inventory is attributed to spec construction where developers are
racing to deliver new product to the market. The hottest locations have been
in the Southeast submarket where community incentives have attracted
companies to cities like Twinsburg and Streetsboro. In Twinsburg, Scannell
recently completed their second spec building with 276,000 square feet at
Cornerstone Parkway. Meanwhile, in nearby Glenwillow, Westminster Capital
recently delivered a 434,000-square-foot spec warehouse in July. With modern
bulk vacancy at 6.5 percent and a robust pipeline of proposed projects
totaling more than 3.2 million square feet, the pace of construction should
remain elevated in the near-term.
Contrary to the growth in the distribution sector, manufacturing is beginning
to show signs of weakness. September marked the second consecutive
month of contraction for the ISM manufacturing index, resulting in the lowest
reading since June of 2009. Prominent factors restricting manufacturers have
been finding talent in a tight labor market and growing uncertainty amidst an
ongoing trade-war. Although domestic consumer demand is expected to
remain high through the holiday season, foreign demand has been tapering
off due to the global slowdown and trade concerns. With manufactures on
alert, real estate decisions are being delayed and activity is beginning to slow.
Outlook
With a number of ongoing construction projects and more groundbreakings
planned, look for vacancy to increase as deliveries will need time to be
absorbed. Rent growth in the 2.0 percent range is expected as the warehouse
and distribution market grows. However, caution must be applied to the
manufacturing sector as increasing economic uncertainty and political
headwinds converge. Until these issues are resolved, demand may be muted.
Supply shortage intensifies spec construction
0
1,000,000
2,000,000
3,000,000
4,000,000
2016 2017 2018 YTD 2019
Supply and demand (s.f.) Net absorption
Deliveries
6.3%
5.9%
5.5% 5.5%
2016 2017 2018 YTD 2019
Total vacancy
$3.00
$3.50
$4.00
$4.50
$5.00
2016 2017 2018 YTD 2019
Average asking rents ($/s.f.)
W&D Manufacturing
• Modern bulk demand continues to increase, pushing construction levels
to 2.4 million square feet. One third of the construction total is spec.
• Contrary to the growth in the distribution sector, manufacturing is
beginning to show signs of weakness and slowdown in global demand.
• Look for near-term construction to remain elevated and for vacancy to
level off in 2020. Rent growth is expected in the 2.0 percent range.
Top trends
© 2019 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.
Fundamentals Forecast
YTD net absorption 12,344 s.f. ▲
Under construction 2,435,929 s.f. ▲
YTD Deliveries 1,885,527 s.f. ▲
Total vacancy 5.5% ▶
Average asking rent (NNN) $4.27 p.s.f. ▲
Tenant improvements Falling ▼

3. Q3 2019
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.
© 2019 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 211,896,742 274,046 0.1% 13,251,996 6.3% $4.45 1,885,527 2,367,929
Manufacturing 147,152,586 -261,702 -0.2% 6,582,170 4.5% $3.88 0 68,000
Totals 359,049,328 12,344 0.0% 19,834,166 5.5% $4.27 1,885,527 2,435,929
Downtown
Warehouse & Distribution 21,239,538 475,952 2.2% 1,230,988 5.8% $3.58 0 0
Manufacturing 15,202,829 203,097 1.3% 428,898 2.8% $3.79 0 0
Totals 36,442,367 679,049 1.9% 1,659,886 4.6% $3.63 0 0
East
Warehouse & Distribution 2,289,705 -27,595 -1.2% 95,457 4.2% $6.04 80,000 155,916
Manufacturing 1,805,678 -3,598 -0.2% 23,274 1.3% $4.00 0 0
Totals 4,095,383 -31,193 -0.8% 118,731 2.9% $5.64 80,000 155,916
Medina County
Warehouse & Distribution 12,106,216 -143,247 -1.2% 580,141 4.8% $3.37 0 540,000
Manufacturing 6,265,522 -4,693 -0.1% 75,807 1.2% $3.82 0 0
Totals 18,371,738 -147,940 -0.8% 655,948 3.6% $3.42 0 540,000
Northeast
Warehouse & Distribution 28,593,754 966,774 3.4% 1,038,469 3.6% $3.64 780,000 350,976
Manufacturing 31,087,900 -311,799 -1.0% 1,670,140 5.4% $3.74 0 0
Totals 59,681,654 654,975 1.1% 2,708,609 4.5% $3.70 780,000 350,976
South
Warehouse & Distribution 14,157,711 -231,025 -1.6% 1,160,241 8.2% $5.44 0 0
Manufacturing 10,305,081 54,797 0.5% 551,781 5.4% $5.02 0 68,000
Totals 24,462,792 -176,228 -0.7% 1,712,022 7.0% $5.30 0 68,000
Southeast
Warehouse & Distribution 50,822,654 -515,311 -1.0% 3,737,752 7.4% $5.12 866,000 656,600
Manufacturing 18,316,206 -88,135 -0.5% 640,884 3.5% $5.80 0 0
Totals 69,138,860 -603,446 -0.9% 4,378,636 6.3% $5.22 866,000 656,600
Southwest
Warehouse & Distribution 22,055,076 36,517 0.2% 1,964,707 8.9% $4.44 36,000 100,000
Manufacturing 17,229,029 141,157 0.8% 829,870 4.8% $3.76 0 0
Totals 39,284,105 177,674 0.5% 2,794,577 7.1% $4.24 36,000 100,000
Summit County
Warehouse & Distribution 37,577,952 -209,538 -0.6% 1,836,288 4.9% $4.48 20,000 376,687
Manufacturing 23,065,699 -118,448 -0.5% 1,787,529 7.7% $3.35 0 0
Totals 60,643,651 -327,986 -0.5% 3,623,817 6.0% $3.92 20,000 376,687
West
Warehouse & Distribution 22,933,509 -63,570 -0.3% 1,737,228 7.6% $3.65 103,527 187,750
Manufacturing 24,502,113 -308,911 -1.3% 766,098 3.1% $3.39 0 0
Totals 47,435,622 -372,481 -0.8% 2,503,326 5.3% $3.57 103,527 187,750

4. Q3 2019
Modern Bulk
Cleveland Industrial Outlook
0
800,000
1,600,000
2,400,000
2011 2013 2015 2017 2019
Absorption New supplyInventory 18,283,232 s.f.
Vacancy 6.5%
Average asking rent (NNN) $5.48
YTD completions 1,749,527 s.f.
Under construction 1,913,413 s.f.
Percent preleased 61.4%
Tenant Address s.f.
L’Oreal 10345 Philipp 649,000
Vitamix 23221 Morgan 175,000
CPP 26751 Bluestone 145,000
Treadmaxx Cornerstone 96,000
Lincoln Electric 26250 Bluestone 75,000
Supply and demandFundamentals
Asking rents and vacancyRecent leasing
$4.00
$4.75
$5.50
$6.25
2010 2012 2014 2016 2018
0%
7%
14%
21%
Rents Vacancy
Modern bulk properties are defined as warehouses ≥75,000 square feet, built since 2000 with 24’ clear heights and ESFR.
© 2019 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.
Building s.f. $ p.s.f. Buyer
8745 Chamberlin 137,000 $92 Ares Capital
3310 Greensburg 120,000 $73 Four Springs
1200 S Chillicothe 409,000 $60 Pinchal
5565-5575 Venture 251,195 $57 Arcapita JV
10250 Philipp 195,000 $46 Weston
Large blocksRecent sales
Address Available s.f. Rent
43500 Victory Now 434,000 $5.50
4930 Scarlet Q1 2020 214,000 $5.75
Cornerstone Pkwy Now 180,000 $5.50
10615 Madison Q4 2019 169,000 $5.75
10069 Wellman Q2 2020 150,000 $5.50

5. Q3 2019
Construction
Cleveland Industrial Outlook
1
4
3
5
2
This map highlights a partial list of construction projects either planned, under construction, or recently completed.
© 2019 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: 10069 Wellman
Building size: 150,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Levelan Partners
Construction type: Spec
Est. completion: Q2 2020
2
Address: Cornerstone
Building size: 276,000 s.f.
Percent leased: 35%
Tenants(s): Treadmaxx
Owner: Scannell
Construction type: Spec
Completed: Q2 2019
6
Address: 43500 Victory
Building size: 434,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Westminster
Construction type: Spec
Completed: Q3 2019
5
Address: 38585 Jet Center
Building size: 130,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Weston
Construction type: Spec
Est. completion: Q4 2019
4
Address: 3620 Mallard
Building size: 103,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Brad Maloof et al
Construction type: Spec
Est. completion: Q3 2019
7
Address: 4930 Scarlet
Building size: 213,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Fogg/Brennan JV
Construction type: Spec
Est. completion: Q1 2020
6
3
Address: 10615 Madison
Building size: 169,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Weston
Construction type: Spec
Est. completion: Q3 2019
7
7

6. Q3 2019
Sales
Cleveland Industrial Outlook
This dashboard analyzes industrial sales ≥$1,000,000 and ≥30,000 square feet over a 12-month period, ending September 30, 2019.
© 2019 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.
Noteable sales transactions
Size (s.f.) $ p.s.f. Sale date
655,000 $68 Nov-18
230,000 $27,016,000 $117 Apr-19
Plymouth Industrial Weston 401,401 $27,000,000 $67 Oct-18
Pinchal & Company Scannell Properties 409,495 $24,569,700 $60 Dec-18
MTD Products Oak Tree Real Estate Holdings 295,850 $13,570,000 $46 Dec-18
Weston Grace Bay Investments 194,632 $12,700,000 $65 May-19
137,000 $12,615,385 $92 Dec-18
Robert Brehmer 300,900 $9,580,000 $32 Jan-19
1 Merit Drive Nl Ventures 130,000 $6,725,000 $52 Feb-19
1300 Danner Drive OEM/Miller 112,670 $5,000,000 $44 Feb-19
12 months at a glance Sales volume by building type
Total volume ($) $305,006,992
Total volume (s.f.) 7,012,426
Number of transactions 74
Number of investment sales 40
Average price per square footSales volume by submarket (s.f.)
Number of sale-leasebacks 0
Number of owner-user sales 34
Transactions details
$44,550,000
Seller Sales priceBuilding address Buyer
Seven building portfolio Arcapita Joint Venture Biynah Industrial Partners
Investcorp International Link Industrial Properties
30339 Diamond Parkway
10250 Philipp Parkway
8745 Chamberlin Road
3201 Columbia Road
1200 S Chillicothe Road
Ares Commercial Real Estate Pinchal & Company
S-l Investment Management
Starwood Capital
Spiegelberg Manufacturing1793 Enterprise Parkway
Four building portfolio
0 1,000,000 2,000,000 3,000,000
Summit
Southeast
Medina
Southwest
Northeast
West
South
East
Downtown
0
1,500,000
3,000,000
4,500,000
6,000,000
$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

7. Q3 2019
Employment
Cleveland Industrial Outlook
3.7%U.S. unemployment
1.4%U.S. 12-month job growth
4.1%Cleveland unemployment
1.2%Cleveland 12-month job growth
4.1%Ohio unemployment
0.4%Ohio 12-month job growth
-0.5%
0.2%
0.9%
1.6%
2.3%
3.0%
2015 2016 2017 2018 2019
Cleveland U.S.
-1,000
-1,000
-600
-300
-200
0
1,400
2,900
4,500
7,000
-6,700-5,800-4,900-4,000-3,100-2,200-1,300-4005001,4002,3003,2004,1005,0005,9006,8007,7008,600
Trade, Transportation & Utilities
Financial Activities
Leisure & Hospitality
Other Services
Information
Manufacturing
Government
Mining, Logging & Construction
Educational & Health Services
Professional & Business Services
-7,000
-2,500
2,000
6,500
11,000
15,500
2015 2016 2017 2018 2019
Trade,Transportation & Utilities Manufacturing
Mining, Logging & Construction Other Services
19%
17%
16%12%
11%
10%
6%
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Mining, Logging & Construction
Other Services
Information
* Represents 12-month change in employment. All charts represent the latest economic data available from the Bureau of Labor Statistics as of September 2019.
© 2019 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.
Job growth by sector*Historical employment
Job growth*
Employment by industry Industrial employment*
0%
4%
8%
12%
910,000
1,010,000
1,110,000
2015 2016 2017 2018 2019
Employment Unemployment

8. Andrew Batson
Vice President, Research
+1 216 937 4374
andrew.batson@am.jll.com
Johnathan Miller
Research Analyst
+1 216 937 4381
johnathan.miller@am.jll.com
Contact
About JLL
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a global workforce of nearly 92,000 as of June 30, 2019. JLL is
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LaSalle Incorporated. For further information, visit jll.com
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© 2019 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.