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

1. JLL Research
Cleveland | Q3 2020
Industrial Outlook
An in-depth look at the Cleveland industrial
market. Analysis includes leasing, sales,
construction and employment.

2. Q3 2020
Insight
Cleveland Industrial Outlook
© 2020 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.
Top trends
Cleveland’s industrial market has proven to be resilient during the COVID-19
pandemic and the ensuing economic headwinds. Vacancy is currently 5.5%,
a modest increase of 40 basis points year-over-year, mainly due to new
construction. Meanwhile, asking rents have increased 2.9% year-over-year.
Construction activity remains elevated across the region. Currently 2.6
million square feet is under construction and an additional 851,000 square
feet is scheduled to break ground in the fourth quarter. Speculative
construction has been increasing over the last three years, a result of quick
lease-up timeframes. The 434,000-square-foot Gateway Commerce Center
in Streetsboro is the latest speculative project to break ground.
Investment sales activity accelerated in the third quarter following a state-
wide shelter-in-place order during the spring months. Industrial real estate
in Cleveland is increasingly gaining interest from institutional investors
given the stability of the sector and growing occupier demand related to e-
commerce sales. The latest example of this trend is STAG Industrial’s
purchase of the 276,000-square-foot multi-tenant warehouse at 8601
Independence Parkway in Twinsburg. The property sold for $27.8 million or
$101 per square foot, representing one of the highest sales comps on a per
square foot basis within the last 10 years.
Outlook
Market fundamentals will likely continue improving into 2021, a result of
positive structural factors such as increased e-commerce sales,
manufacturing reshoring, and increased inventory levels. Investor interest in
Cleveland is likely to accelerate due to low interest rates and turbulence in
other asset classes. Look for additional investment sales to occur during the
final months of the year. And finally, given the level of speculative product
hitting the market during the second half of 2020, an increase in leasing
activity is expected as companies secure premium warehouse space for
future growth.
Cleveland’s industrial market proves to be resilient,
increased construction and sales expected into 2021
• Vacancy has increased a modest 40 basis points year-over-year,
mainly due to new construction. Meanwhile, asking rents are up 2.9%.
• 2.6 million square feet is under construction and an additional
851,000 square feet is in the pipeline, a third of which is speculative.
• Market fundamentals will likely continue improving into 2021, a result
of positive structural factors such as increased e-commerce sales,
manufacturing reshoring, and increased inventory levels.
Fundamentals Forecast
YTD net absorption 213,354 s.f. ▶
Under construction 2,572,536 s.f. ▶
Total vacancy 5.5% ▶
Sublease vacancy 2,191,191 s.f. ▲
Direct asking rent $4.25 p.s.f. ▶
Sublease asking rent $3.40 p.s.f. ▼
Concessions Increasing ▶
0
2,000,000
4,000,000
2016 2017 2018 2019 YTD
2020
Supply and demand (s.f.) Net absorption
Deliveries
3%
8%
2006 2008 2010 2012 2014 2016 2018 2020
Total vacancy (%)
$2
$3
$4
$5
2006 2008 2010 2012 2014 2016 2018 2020
Average asking rent ($ p.s.f.)
Direct Sublease

3. Q3 2020
Statistics
Cleveland Industrial Outlook
Inventory
(s.f.)
YTD
absorption
(s.f.)
YTD
absorption
(% of stock)
Total
vacancy
(s.f.)
Total
vacancy
(%)
Average
asking rent
($p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
ClevelandTotal
Warehouse & Distribution 218,986,382 1,091,098 0.5% 13,629,352 6.2% $4.43 1,271,003 2,439,036
Manufacturing 144,418,932 -877,744 -0.6% 6,438,130 4.5% $3.84 148,000 133,500
Total 363,405,314 213,354 0.1% 20,067,482 5.5% $4.25 1,419,003 2,572,536
Downtown
Warehouse & Distribution 22,068,262 -189,254 -0.9% 1,651,280 7.5% $3.06 0 0
Manufacturing 15,333,572 25,384 0.2% 498,884 3.3% $3.79 0 0
Total 37,401,834 -163,870 -0.4% 2,150,164 5.7% $3.19 0 0
East
Warehouse & Distribution 2,365,304 182,604 7.7% 89,093 3.8% $5.79 155,916 0
Manufacturing 1,843,973 -44,741 -2.4% 44,741 2.4% $6.25 0 0
Total 4,209,277 137,863 3.3% 133,834 3.2% $5.95 155,916 0
Medina County
Warehouse & Distribution 13,190,947 501,950 3.8% 510,714 3.9% $4.46 506,000 0
Manufacturing 6,137,319 -21,600 -0.4% 101,634 1.7% $4.98 0 0
Total 19,328,266 480,350 2.5% 612,348 3.2% $4.57 506,000 0
Northeast
Warehouse & Distribution 29,677,041 88,118 0.3% 1,382,689 4.7% $4.24 145,400 300,000
Manufacturing 29,508,196 -190,101 -0.6% 1,049,563 3.6% $3.95 0 0
Total 59,185,237 -101,983 -0.2% 2,432,252 4.1% $4.10 145,400 300,000
South
Warehouse & Distribution 14,449,663 74,503 0.5% 970,382 6.7% $5.12 0 0
Manufacturing 10,423,276 21,897 0.2% 521,873 5.0% $4.35 68,000 0
Total 24,872,939 96,400 0.4% 1,492,255 6.0% $4.84 68,000 0
Southeast
Warehouse & Distribution 52,852,005 498,065 0.9% 3,590,331 6.8% $4.51 150,000 592,000
Manufacturing 17,726,833 -394,901 -2.2% 1,227,181 6.9% $3.99 0 0
Total 70,578,838 103,164 0.1% 4,817,512 6.8% $4.43 150,000 592,000
Southwest
Warehouse & Distribution 22,976,168 -62,233 -0.3% 1,653,403 7.2% $5.69 100,000 735,296
Manufacturing 16,860,151 -173,638 -1.0% 1,076,166 6.4% $3.26 0 0
Total 39,836,319 -235,871 -0.6% 2,729,569 6.9% $4.75 100,000 735,296
Summit County
Warehouse & Distribution 38,033,731 -462,605 -1.2% 2,259,277 5.9% $4.65 213,687 811,740
Manufacturing 22,294,980 -223,770 -1.0% 1,538,997 6.9% $3.73 80,000 0
Total 60,328,711 -686,375 -1.1% 3,798,274 6.3% $4.22 293,687 811,740
West
Warehouse & Distribution 23,373,261 459,950 2.0% 1,522,183 6.5% $3.39 0 0
Manufacturing 24,290,632 123,726 0.5% 379,091 1.6% $3.50 0 133,500
Total 47,663,893 583,676 1.2% 1,901,274 4.0% $3.40 0 133,500
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.
© 2020 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.

4. Q3 2020
Modern Bulk
Cleveland Industrial Outlook
0
1,000,000
2,000,000
3,000,000
2012 2014 2016 2018 2020
Absorption New supplyInventory 21,071,309 s.f.
Vacancy 5.4%
Average asking rent (NNN) $5.86
YTD completions 1,093,087 s.f.
Under construction 2,439,036 s.f.
Percent preleased 57.6%
Tenant Address s.f.
Amazon 43500 Victory 434,000
Amazon 10615 Madison 169,000
Bulten 10069 Wellman 150,000
Lowe’s 8601 Independence 132,000
Wayfair 14720 Foltz 68,000
Supply and demandFundamentals
Asking rents and vacancyRecent leasing
$4.00
$4.75
$5.50
$6.25
2012 2014 2016 2018 2020
0%
7%
14%
21%
Rents Vacancy
Building s.f. $ p.s.f. Buyer
2050 E Aurora 304,000 $157 ElmTree
8601 Independence 276,000 $101 STAG
3310 Greensburg 120,000 $73 Four Springs
10250 Philipp 195,000 $47 Weston
2255 Phoenix 700,000 $45 US Realty
Large blocksRecent sales
Address Available s.f. Rent
10250 S Chillicothe Q2 2021 434,000 $5.50
6825 Engle Q4 2020 300,000 $6.50
4930 Scarlet Now 214,000 $5.75
12850 Darice Now 170,000 $6.95
38585 Jet Center Now 130,000 $5.75
Modern bulk properties are defined as warehouses ≥75,000 square feet, built since 2000 with 24’ clear heights and ESFR.
© 2020 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.

5. Q3 2020
Construction
Cleveland Industrial Outlook
7
4
3
6
7
Address: 10069 Wellman
Building size: 150,000 s.f.
Percent leased: 100%
Tenant(s): Bulten
Owner: Levelan Partners
Construction type: Spec
Completed: Q1 2020
6
Address: 38585 Jet Center
Building size: 130,000
Percent leased: 0%
Tenants(s): N/A
Owner: Weston
Construction type: Spec
Completed: Q4 2019
2
Address: 43500 Victory
Building size: 434,000 s.f.
Percent leased: 100%
Tenant(s): Amazon
Owner: Westminster
Construction type: Spec
Completed: Q3 2019
3
Address: 14720 Foltz
Building size: 179,000 s.f.
Percent leased: 38%
Tenant(s): Wayfair
Owner: Scannell
Construction type: Spec
Est. completion: Q4 2020
4
Address: 6825 Engle
Building size: 300,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Harsax
Construction type: Spec
Est. completion: Q4 2020
1
Address: 10250 S Chillicothe
Building size: 434,000
Percent leased: 0%
Tenant(s): N/A
Owner: Westminster, Gies
Construction type: Spec
Est. completion: Q2 2021
2
5
Address: 4930 Scarlet
Building size: 214,000 s.f.
Percent leased: 0%
Tenant(s): N/A
Owner: Fogg/Brennan JV
Construction type: Spec
Completed: Q1 2020
5
This map highlights a partial list of construction projects either planned, under construction, or recently completed.
© 2020 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

6. Q3 2020
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, 2020.
© 2020 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
303,888 $157 Nov-19
276,000 $27,800,000 $101 Sep-20
44,950 $3,201,218 $71 Dec-19
BMA Properties Tribus Aerospace 40,163 $2,839,900 $71 Oct-19
57,016 $4,026,000 $71 May-20
DRG Hydraulics Geis Companies 49,857 $3,000,000 $60 Mar-20
Integrated Mill Systems Vintage Development Group 45,121 $2,450,000 $54 Dec-19
Technology Recovery Group 47,140 $2,525,000 $54 Dec-19
46,138 $2,467,071 $53 Apr-20
278,000 $13,000,000 $47 Oct-19
Andover Properties Sonrise Storage
Bissett IndustriesPrecision Metal Products
BASF
Heidtman Steel Products
30505 Clemens Rd
1252 Mina Ave
Reginald B Wyman
Worthington Industries
23463 Commerce Park Dr
4600 Heidtman Pkwy
Master Builders Solutions
STAG Industrial
9005 Bank St
1900 Case Pkwy
8601 Independence Pky
34700 Lakeland Blvd
$47,703,771
Seller Sales priceBuilding address Buyer
2050 East Auoroa Rd ElmTree Funds Scannell Properties
Number of owner-user sales 23
Transactions details
Number of sale-leasebacks 0
Scannell Properties
1702 Joseph Lloyd Pkwy
12 months at a glance Sales volume by building type
Total volume ($) $221,295,304
Total volume (s.f.) 4,947,643
Number of transactions 45
Number of investment sales 22
Average price per square footSales volume by submarket (s.f.)
0 1,000,000 2,000,000
Southeast
Southwest
West
Northeast
Summit
Downtown
South
Medina
East
-500,000
1,000,000
2,500,000
4,000,000
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
Warehouse / Distribution Manufacturing Flex
Total volume ($) Total volume (s.f.)
$0
$20
$40
$60
Warehouse / Distribution Manufacturing Flex

7. Q3 2020
Employment
Cleveland Industrial Outlook
8.4%U.S. unemployment
-7.0%U.S. 12-month job growth
11.7%Cleveland unemployment
-11.9%Cleveland 12-month job growth
8.9%Ohio unemployment
-8.8%Ohio 12-month job growth
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
2016 2017 2018 2019 2020
Cleveland U.S.
-70,000
-50,000
-30,000
-10,000
10,000
30,000
2016 2017 2018 2019 2020
Trade,Transportation & Utilities Manufacturing
Mining, Logging & Construction Other Services
19%
18%
15%12%
12%
8%
7%
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Mining, Logging & Construction
Other Services
Information
Job growth by sector*Historical employment
Job growth*
Employment by industry Industrial employment*
0%
8%
16%
24%
850,000
950,000
1,050,000
2016 2017 2018 2019 2020
Employment Unemployment
-34,300
-24,900
-21,700
-16,900
-13,200
-9,500
-3,900
-3,800
-1,400
300
-50,000 -40,000 -30,000 -20,000 -10,000 0 10,000
Leisure & Hospitality
Professional & Business Services
Educational & Health Services
Government
Trade, Transportation & Utilities
Manufacturing
Other Services
Financial Activities
Information
Mining, Logging & Construction
* Represents 12-month change in employment. All charts represent the latest economic data available from the Bureau of Labor Statistics as of July 2020.
© 2020 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
Senior Vice President, Research
+1 216 937 4374
andrew.batson@am.jll.com
Joe Warren
Research Analyst
+1 216 912 4511
joe.warren@am.jll.com
Contact
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© 2020 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.