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

1. JLL Research
Cleveland | Q3 2018
Industrial Outlook
An in-depth look at the Cleveland industrial
market. Analysis includes leasing, sales,
construction and employment.

2. Q3 2018
Insight
Cleveland Industrial Outlook
Industrial construction continues at a robust pace across the metro as
companies benefit from an accelerating economy and federal tax reform.
More than 5.2 million square feet of manufacturing and warehouse space will
pass through the development pipeline in 2018, representing the highest level
of construction activity in more than 20 years. Underpinning a good portion of
this development has been Amazon. The e-commerce giant recently moved
into a new 855,000-square-foot fulfillment center in North Randall, and next
year, Amazon will open a 650,000-square-foot fulfillment center in Euclid.
Interestingly, both Amazon locations are 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 overwhelming amount of the development pipeline is build-to-suit (88.4
percent), however, the market is seeing a handful of speculative warehouses
go up as well. In Euclid, Ray Fogg recently completed a 75,000-square-foot
warehouse. In Sheffield Village, a group led by Brad Maloof is constructing a
103,000-square-foot warehouse. In Cleveland, Weston is preparing to build a
163,000-square-foot warehouse. Finally, in Glenwillow, Westminster Capital is
currently building a 434,000-square-foot warehouse. Westminster’s project is
the largest speculative warehouse to ever be constructed in Cleveland and is
welcomed news to tenants who face a supply-constrained market.
Outlook
Close to 300,000 square feet of recently completed speculative space is
currently on the market, and the depth of tenant demand will be tested by the
additional 700,000 square feet of speculative space that is set to deliver over
the coming year. With that said, demand remains strong for modern bulk
product with an ever-tightening vacancy rate of 3.1 percent. This additional
product will help alleviate some of the pent-up demand in the market.
Looking forward, leasing should accelerate as these projects near completion.
Fundamentals Forecast
YTD net absorption 1,714,005 s.f. ▲
Under construction 3,367,000 s.f. ▶
YTD Deliveries 1,712,500 s.f. ▲
Total vacancy 5.4% ▼
Average asking rent (NNN) $4.26 p.s.f. ▲
Tenant improvements Falling ▼
Construction at its highest level in more than 20 years
0
1,000,000
2,000,000
3,000,000
4,000,000
2014 2015 2016 2017 YTD
2018
Supply and demand (s.f.) Net absorption
Deliveries
6.9%
6.7%
6.3%
5.9%
5.4%
2014 2015 2016 2017 YTD 2018
Total vacancy
$3.00
$3.50
$4.00
$4.50
2014 2015 2016 2017 YTD 2018
Average asking rents ($/s.f.)
W&D Manufacturing
© 2018 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.
• More than 5.2 million square feet of manufacturing and warehouse
space will pass through the development pipeline in 2018.
• The majority of the construction is build-to-suit (88.4 percent), however,
a handful of speculative warehouses are going up as well.
• Modern bulk vacancy is anemic at just 3.1 percent, however, speculative
developments will help alleviate pent-up demand in the market.
Top trends

3. Q3 2018
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.
© 2018 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 208,717,265 773,225 0.4% 12,947,197 6.2% $4.36 1,668,500 3,367,000
Manufacturing 144,995,212 835,129 0.6% 6,260,991 4.3% $4.04 44,000 0
Totals 353,712,477 1,714,005 0.5% 19,208,188 5.4% $4.26 1,712,500 3,367,000
Flex 22,741,451 401,745 1.8% 2,123,398 9.3% $8.97 145,000 34,000
Downtown
Warehouse & Distribution 21,370,594 304,276 1.4% 1,539,986 7.2% $3.12 0 0
Manufacturing 15,226,409 -30,253 -0.2% 759,641 5.0% $5.34 0 0
Totals 36,597,003 274,023 0.7% 2,299,627 6.3% $3.85 0 0
Flex 1,128,784 16,821 1.5% 6,563 0.6% $16.00 0 0
East
Warehouse & Distribution 2,282,718 21,917 1.0% 116,232 5.1% $6.17 0 0
Manufacturing 1,805,678 42,417 2.3% 23,286 1.3% $4.97 0 0
Totals 4,088,396 64,334 1.6% 139,518 3.4% $5.97 0 0
Flex 1,981,281 -43,749 -2.2% 221,856 11.2% $8.63 145,000 0
Medina County
Warehouse & Distribution 12,380,320 266,107 2.1% 318,365 2.6% $5.00 0 506,000
Manufacturing 6,151,152 220,888 3.6% 103,987 1.7% $4.75 0 0
Totals 18,531,472 486,995 2.6% 422,352 2.3% $4.94 0 506,000
Flex 1,333,923 50,588 3.8% 124,001 9.3% $8.25 0 0
Northeast
Warehouse & Distribution 27,848,442 457,407 1.6% 1,322,998 4.8% $3.68 262,500 780,000
Manufacturing 30,821,897 -178,515 -0.6% 1,316,987 4.3% $4.31 0 0
Totals 58,670,339 278,892 0.5% 2,639,985 4.5% $3.99 262,500 780,000
Flex 1,831,598 -8,015 -0.4% 251,857 13.8% $10.51 0 0
South
Warehouse & Distribution 14,225,483 31,984 0.2% 1,164,378 8.2% $4.97 111,000 0
Manufacturing 10,295,081 -11,531 -0.1% 428,586 4.2% $3.69 0 0
Totals 24,520,564 20,453 0.1% 1,592,964 6.5% $4.63 111,000 0
Flex 3,712,480 28,455 0.8% 398,423 10.7% $9.44 0 0
Southeast
Warehouse & Distribution 48,839,847 -409,354 -0.8% 3,437,450 7.0% $4.69 1,170,000 1,603,000
Manufacturing 18,210,480 384,291 2.1% 538,826 3.0% $4.80 0 0
Totals 67,050,327 -25,063 0.0% 3,976,276 5.9% $4.70 1,170,000 1,603,000
Flex 6,267,458 134,310 2.1% 662,661 10.6% $8.98 0 0
Southwest
Warehouse & Distribution 21,975,963 503,473 2.3% 1,956,402 8.9% $4.74 125,000 212,000
Manufacturing 17,194,836 -29,438 -0.2% 861,368 5.0% $3.84 0 0
Totals 39,170,799 474,035 1.2% 2,817,770 7.2% $4.46 125,000 212,000
Flex 2,893,290 -85,822 -3.0% 244,993 8.5% $7.33 0 0
Summit County
Warehouse & Distribution 36,696,392 -103,627 -0.3% 1,681,296 4.6% $4.57 0 163,000
Manufacturing 22,838,299 485,664 2.1% 1,627,548 7.1% $3.43 44,000 0
Totals 59,534,691 382,037 0.6% 3,308,844 5.6% $4.01 44,000 163,000
Flex 2,474,798 107,648 4.3% 179,038 7.2% $10.22 0 34,000
West
Warehouse & Distribution 22,929,879 -317,080 -1.4% 1,497,276 6.5% $3.72 0 103,000
Manufacturing 23,074,616 -96,394 -0.4% 695,697 3.0% $3.01 0 0
Totals 46,004,495 -413,474 -0.9% 2,192,973 4.8% $3.49 0 103,000
Flex 1,001,735 42,954 4.3% 53,397 5.3% $8.89 0 0

4. Q3 2018
Modern Bulk
Cleveland Industrial Outlook
0
800,000
1,600,000
2,400,000
2010 2012 2014 2016 2018
Absorption New supplyInventory 17,236,409 s.f.
Vacancy 3.1%
Average asking rent (NNN) $5.52
YTD completions 1,551,480 s.f.
Under construction 3,420,995 s.f.
Percent preleased 84.3%
Tenant Address s.f.
McCaster 1200 Chillicothe 410,000
O’Reilly Auto Parts 2050 Aurora 404,000
HD Supply 30311 Emerald 141,000
Mantua 31031 Diamond 110,000
Chep Pallets 30311 Emerald 69,000
Supply and demandFundamentals
Asking rents and vacancyRecent leasing
$3.75
$4.50
$5.25
$6.00
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.
© 2018 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
8685 Independence 248,000 $82 Omega
14790 Foltz 185,210 $79 Founders
12850 Darice 554,037 $72 VEREIT
30339 Diamond 401,401 $67 Plymouth
Large blocksRecent sales
Address Available s.f. Rent
43500 Victory Q1 2019 434,000 $5.50
4863 Scarlet Now 136,000 $5.75
9050 Tyler Now 108,500 $5.00
3620 Mallard Run Q1 2019 103,000 $5.60
26250 Bluestone Now 75,000 $5.75

5. Q3 2018
Construction
Cleveland Industrial Outlook
3
1
5
4
6
2
This map highlights a partial list of construction projects either planned, under construction, or recently completed.
© 2018 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: 1280 E 260th
Building size: 650,000 s.f.
Percent leased: 100%
Tenant(s): Amazon
Owner: Seefried
Construction type: BTS
Est. completion: Q2 2019
2
Address: 26250 Bluestone
Building size: 75,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Fogg
Construction type: Spec
Completion: Q3 2018
3
Address: 21201 Miles
Building size: 855,000 s.f.
Percent leased: 100%
Tenant(s): Amazon
Owner: Seefried
Construction type: BTS
Completion: Q3 2018
4
Address: 43500 Victory
Building size: 434,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Westminster
Construction type: Spec
Est. Completion: Q1 2019
5
Address: 8701 Chamberlin
Building size: 404,000 s.f.
Percent leased: 100%
Tenant(s): O'Reilly's
Owner: Scannell
Construction type: BTS
Est. completion: Q3 2019
6
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: Q1 2019

6. Q3 2018
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, 2018.
© 2018 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
401,401 $67 Sep-18
668,592 $32 Jul-18
185,210 $14,650,000 $79 Apr-18
212,000 $14,441,686 $68 Mar-18
Geis Companies 189,000 $13,500,000 $71 May-18
Ed Natan 79,004 $8,250,000 $104 Feb-18
CDH Investments 115,000 $6,722,204 $58 Oct-17
Boltun United Real Estate Geis Companies 122,024 $6,500,000 $53 Oct-17
602,910 $5,500,000 $9 Oct-17
Global Net Lease Constractors Steel 142,480 $4,948,964 $35 May-18
12 months at a glance Sales volume by building type
Total volume ($) $259,290,071
Total volume (s.f.) 8,243,194
Number of transactions 63
Number of investment sales 22
Average price per square footSales volume by submarket (s.f.)
Number of sale-leasebacks 0
Number of owner-user sales 41
Transactions details
30339 Diamond Parkway Plymouth Industrial Weston $27,000,000
Seller company Sales priceBuilding address Buyer company
3009 Gilchrist Road
Fourteen building portfolio Brennan Investment Group
$21,376,099Global Net Lease Insite Real Estate
Three building portfolio
603 Alpha Drive The Progressive Corporation
6200 Hillcrest Road
14790 Foltz Parkway Founders Properties
4600 Prosper Drive
4560 Darrow Road
Six building portfolio
Reserve Management Group
Scannell Properties
Arch Street Capital Advisors
Alex Brown Realty
Gatehouse Bank
Bemis Company
0 1,000,000 2,000,000 3,000,000
Summit
West
Medina
Southeast
South
Northeast
Southwest
East
Downtown
0
1,500,000
3,000,000
4,500,000
6,000,000
7,500,000
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
Warehouse / Distribution Manufacturing Flex
Total volume ($) Total volume (s.f.)
$0
$25
$50
$75
Warehouse / Distribution Manufacturing Flex

7. Q3 2018
Employment
Cleveland Industrial Outlook
3.9%U.S. unemployment
1.8%U.S. 12-month job growth
5.2%Cleveland unemployment
2.5%Cleveland 12-month job growth
4.6%Ohio unemployment
1.6%Ohio 12-month job growth
-0.5%
0.2%
0.9%
1.6%
2.3%
3.0%
2014 2015 2016 2017 2018
Cleveland U.S.
6,900
5,500
5,100
4,000
3,700
1,400
200
100
-100
-200
-2,000 1,800 5,600 9,400
Professional & Business Services
Leisure & Hospitality
Trade, Transportation & Utilities
Manufacturing
Educational & Health Services
Mining, Logging & Construction
Government
Other Services
Financial Activities
Information
0%
4%
8%
12%
920,000
980,000
1,040,000
1,100,000
2014 2015 2016 2017 2018
Employment Unemployment
19%
17%
15%12%
11%
11%
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 2018.
© 2018 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
-8,000
-3,500
1,000
5,500
10,000
2014 2015 2016 2017 2018
Trade,Transportation & Utilities Manufacturing
Mining, Logging & Construction Other Services
Industrial employment*

8. Andrew Batson
Vice President, Research
+1 216 937 4374
andrew.batson@am.jll.com
Johnathan Miller
Research Associate
+1 216 937 4381
johnathan.miller@am.jll.com
Contact
© 2018 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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occupiers and investors achieve their business ambitions. In
2017, JLL had revenue of $7.9 billion and fee revenue of $6.7
billion; managed 4.6 billion square feet; and completed
investment sales, acquisitions and finance transactions of
approximately $170 billion. At the end of 2017, JLL had
nearly 300 corporate offices, operations in over 80 countries
and a global workforce of 82,000. As of December 31, 2017,
LaSalle had $58.1 billion of real estate assets under
management. JLL is the brand name, and a registered
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information, visit www.jll.com.
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