The document provides an industrial market outlook for Cleveland in Q2 2019. It summarizes that: - Cleveland has just under 1.0 million square feet of spec construction currently underway, with another 1.2 million square feet in the pipeline. - Companies continue to invest in their real estate to improve operational efficiencies, attract new employees, and better serve their clientele. - Look for new construction to slow and for vacancy to level off in 2019 as the market matures. Rent growth will continue in the 3.0 percent range.

1. JLL Research
Cleveland | Q2 2019
Industrial Outlook
An in-depth look at the Cleveland industrial
market. Analysis includes leasing, sales,
construction and employment.

2. Q2 2019
Insight
Cleveland Industrial Outlook
Spec construction pushed forward maintaining historic levels of ongoing
projects totaling just under 1.0 million square feet with another 1.2 million
square feet of space in the pipeline. Developers have been busy, but the
manufacturing sector showed a slight decline in sentiment in the second
quarter due to weakening demand and growing trade concerns. Despite this,
construction remains a mainstay with a total of 14 projects currently
underway tallying 2.4 million square feet. This trend continued while
additional industrial parks emerged for development including Scannell’s 22
acres in Bedford Heights and the 87 acres in Mentor owned by a local joint
venture. In the near term, four spec projects are set to deliver this year which
should help alleviate pent-up demand in a market where modern bulk
vacancy is a miniscule 4.1 percent.
Amidst the heightened construction environment, companies continue to
invest in their real estate as a way to improve operational efficiencies, often
consolidating multiple locations into one large, modernized facility. The
location of the new facility is paramount as companies look to relocate near
talent, shipping routes, and clientele. Companies like Trelleborg, Innovest
Global, and Bendix are adhering to this trend, allowing them to align their real
estate needs with their strategic growth plans.
Outlook
With a flurry of construction activity underway, look for groundbreakings to
slow as deliveries will need time to be absorbed. Although companies
continue to invest in their real estate portfolios, this trend may begin to
plateau as increasing economic uncertainty weighs on CEO decision making.
However, Cleveland’s industrial market is performing well and developers
remain optimistic, but political headwinds could pose a downside risk. This
may cause a slowdown in the real estate sector until these issues are resolved
Tight vacancy intensifies construction activity
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% 5.6%
2016 2017 2018 YTD 2019
Total vacancy
$3.00
$3.50
$4.00
$4.50
2016 2017 2018 YTD 2019
Average asking rents ($/s.f.)
W&D Manufacturing
• Cleveland has just under 1.0 million square feet of spec construction
currently underway, with another 1.2 million square feet in the pipeline.
• Companies continue to invest in their real estate to improve operational
efficiencies, attract new employees, and better serve their clientele.
• Look for new construction to slow and for vacancy to level off in 2019 as
the market matures. Rent growth will continue in the 3.0 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 -294,282 s.f. ▶
Under construction 2,352,750 s.f. ▼
YTD Deliveries 1,212,000 s.f. ▲
Total vacancy 5.6% ▶
Average asking rent (NNN) $4.26 p.s.f. ▲
Tenant improvements Falling ▼

3. Q2 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 210,393,327 149,266 0.1% 13,037,333 6.2% $4.41 1,212,000 2,284,750
Manufacturing 147,434,102 -443,548 -0.3% 6,950,458 4.7% $3.96 0 68,000
Totals 357,827,429 -294,282 -0.1% 19,987,791 5.6% $4.26 1,212,000 2,352,750
Downtown
Warehouse & Distribution 21,280,921 47,655 0.2% 1,459,285 6.9% $3.48 0 0
Manufacturing 15,243,544 8,801 0.1% 734,844 4.8% $5.65 0 0
Totals 36,524,465 56,456 0.2% 2,194,129 6.0% $4.21 0 0
East
Warehouse & Distribution 2,289,705 -75,720 -3.3% 175,591 7.7% $6.08 0 0
Manufacturing 1,805,678 -13,507 -0.7% 33,183 1.8% $4.97 0 0
Totals 4,095,383 -89,227 -2.2% 208,774 5.1% $5.90 0 0
Medina County
Warehouse & Distribution 12,094,611 84,661 0.7% 352,233 2.9% $4.11 0 540,000
Manufacturing 6,265,522 -31,693 -0.5% 102,807 1.6% $3.82 0 0
Totals 18,360,133 52,968 0.3% 455,040 2.5% $4.04 0 540,000
Northeast
Warehouse & Distribution 28,645,857 889,689 3.1% 1,136,552 4.0% $3.64 780,000 205,000
Manufacturing 31,058,643 -501,866 -1.6% 1,859,707 6.0% $3.68 0 0
Totals 59,704,500 387,823 0.6% 2,996,259 5.0% $3.66 780,000 205,000
South
Warehouse & Distribution 14,262,894 -50,502 -0.4% 1,018,918 7.1% $5.18 0 0
Manufacturing 10,305,081 -33,145 -0.3% 639,723 6.2% $5.02 0 68,000
Totals 24,567,975 -83,647 -0.3% 1,658,641 6.8% $5.12 0 68,000
Southeast
Warehouse & Distribution 50,013,299 -827,128 -1.7% 3,805,017 7.6% $4.87 432,000 838,000
Manufacturing 18,500,762 90,667 0.5% 542,374 2.9% $4.77 0 0
Totals 68,514,061 -736,461 -1.1% 4,347,391 6.3% $4.86 432,000 838,000
Southwest
Warehouse & Distribution 21,984,550 -8,341 0.0% 2,008,808 9.1% $4.47 0 247,000
Manufacturing 17,239,552 59,681 0.3% 926,346 5.4% $3.45 0 0
Totals 39,224,102 51,340 0.1% 2,935,154 7.5% $4.15 0 247,000
Summit County
Warehouse & Distribution 36,741,793 173,665 0.5% 1,471,964 4.0% $5.43 0 183,000
Manufacturing 23,077,827 -18,733 -0.1% 1,667,814 7.2% $3.24 0 0
Totals 59,819,620 154,932 0.3% 3,139,778 5.2% $4.27 0 183,000
West
Warehouse & Distribution 22,959,070 -84,713 -0.4% 1,753,151 7.6% $3.48 0 271,750
Manufacturing 24,564,964 -35,433 -0.1% 492,620 2.0% $3.00 0 0
Totals 47,524,034 -120,146 -0.3% 2,245,771 4.7% $3.37 0 271,750

4. Q2 2019
Modern Bulk
Cleveland Industrial Outlook
0
800,000
1,600,000
2,400,000
2010 2012 2014 2016 2018
Absorption New supplyInventory 17,758,133 s.f.
Vacancy 4.1%
Average asking rent (NNN) $5.56
YTD completions 1,212,000 s.f.
Under construction 1,940,750 s.f.
Percent preleased 53.0%
Tenant Address s.f.
Vitamix 23221 Morgan 175,000
HD Supply 30311 Emerald 141,000
Seco Machine 3310 Greensburg 120,000
Treadmaxx Cornerstone 96,000
Lincoln Electric 26250 Bluestone 75,500
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
4651 Prosper 219,765 $89 Monmouth
14790 Foltz 185,210 $79 Founders
12850-13000 Darice 554,037 $72 VEREIT
30339 Diamond 401,401 $67 Plymouth
5565-5575 Venture 251,195 $57 Arcapita JV
Large blocksRecent sales
Address Available s.f. Rent
43500 Victory Q3 2019 434,000 $5.50
Cornerstone Pkwy Now 180,000 $5.50
10615 Madison Q4 2019 136,000 $5.75
38585 Jet Center Q4 2019 130,000 $5.75
9050 Tyler Now 108,500 $5.00

5. Q2 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: 26525 Bluestone
Building size: 75,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Fogg
Construction type: Spec
Est. completion: Q4 2019
2
Address: Cornerstone
Building size: 276,000 s.f.
Percent leased: 35%
Tenants(s): Treadmaxx
Owner: Scannell
Construction type: Spec
Completion: Q3 2019
3
Address: 43500 Victory
Building size: 434,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Westminster
Construction type: Spec
Est. Completion: Q2 2019
4
Address: 38585 Jet Center
Building size: 130,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Weston
Construction type: Spec
Est. completion: Q1 2020
5
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: Q2 2019

6. Q2 2019
Sales
Cleveland Industrial Outlook
This dashboard analyzes industrial sales ≥$1,000,000 and ≥30,000 square feet over a 12-month period, ending June 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
Global Net Lease 668,592 $21,376,099 $32 Jul-18
AIC Ventures 351,553 $19,135,000 $55 Aug-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
130,000 $6,725,000 $52 Feb-19
12 months at a glance Sales volume by building type
Total volume ($) $309,943,264
Total volume (s.f.) 7,424,558
Number of transactions 69
Number of investment sales 33
Average price per square footSales volume by submarket (s.f.)
Number of sale-leasebacks 2
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
Four building portfolio
10250 Philipp Parkway
3201 Columbia Road
3009 Gilchrist Road
Sherwood Food Distributors
Insite Real Estate
1793 Enterprise Parkway
1 Merit Drive S-l Investment Management
Ares Commercial Real Estate
Spiegelberg Manufacturing
8745 Chamberlin Road Pinchal & Company
Nl Ventures
16625 Granite Road
0 1,000,000 2,000,000 3,000,000
Summit
Southeast
Southwest
Medina
West
Northeast
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. Q2 2019
Employment
Cleveland Industrial Outlook
3.6%U.S. unemployment
1.5%U.S. 12-month job growth
3.8%Cleveland unemployment
1.4%Cleveland 12-month job growth
4.3%Ohio unemployment
0.8%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.
-3,100
-1,700
-500
900
1,000
1,600
2,900
3,500
3,800
6,700
-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
Manufacturing
Information
Financial Activities
Government
Other Services
Leisure & Hospitality
Educational & Health Services
Mining, Logging & Construction
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%
14%13%
12%
10%
6%
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Other Services
Mining, Logging & Construction
Information
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
* Represents 12-month change in employment. All charts represent the latest economic data available from the Bureau of Labor Statistics as of June 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.

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
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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.