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

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

2. Insight
© 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.
Cleveland Office Outlook
Q3 2020
Leasing activity in Cleveland declined significantly during the third quarter with
just over 150,000 square feet of leases being signed, representing a 70.0 percent
reduction from historical levels. One trend that has continued despite COVID-19
is urban migration. In the third quarter, four companies relocated from the
suburbs to downtown, absorbing 30,000 square feet of office space.
Sales activity in Cleveland has also been muted. Only $33.5 million worth of
office properties have traded since the beginning of the year, representing a
decline of 77.5 percent over historical averages. The largest trade during the
third quarter was the 226,000-square-foot Rockefeller Building in downtown
Cleveland which was 60.0 percent vacant. The building traded for $13.4 million
and is scheduled to be redeveloped into 430 apartments.
One topic that industry insiders have been watching closely is the amount of
sublease space hitting the market. While this trend has been pronounced in
gateway markets across the U.S., it has been less significant in the Midwest, and
certainly in Cleveland. There is currently 353,321 square feet of sublease space
on the market in Cleveland, representing an increase of only 25,000 square feet
since the beginning of the year.
Outlook
COVID-19 has had a significant impact on the Cleveland office market in the
near-term, forcing nearly all employees to work from home since March, and
bringing leasing and sales activity to a near standstill. Companies are taking a
cautious approach to their long-term space needs, and the full impact of this
paradigm shift will not be known for years. We have yet to see a meaningful
impact on market fundamentals. Both asking rents and vacancy across the
market are relatively unchanged since the beginning of the year. Sublease
vacancy remains contained for now, but may increase in the coming quarters if
economic headwinds persist.
Leasing and sales activity decline significantly, rents
and vacancy remain relatively unchanged
• Market activity stalled in the third quarter. Leasing was 70.0 percent below
historical levels while sales volume was down 77.5 percent.
• Sublease vacancy has only increased by 25,000 square feet since the
beginning of the year. However, more sublease space may be coming.
• We have yet to see a meaningful impact on market fundamentals. Both
asking rents and vacancy across the market are relatively unchanged
since the beginning of the year.
Fundamentals Forecast
YTD net absorption 317,530 s.f. ▼
Under construction 20,000 s.f. ▼
Total vacancy 19.6% ▲
Sublease vacancy 353,321 s.f. ▲
Direct asking rent $19.83 p.s.f. ▼
Sublease asking rent $18.29 p.s.f. ▼
Concessions Increasing ▲
-100,000
150,000
400,000
2016 2017 2018 2019 YTD
2020
Supply and demand (s.f.) Net absorption
Deliveries
17%
20%
23%
26%
2006 2008 2010 2012 2014 2016 2018 2020
Total vacancy (%)
$10
$15
$20
$25
2006 2008 2010 2012 2014 2016 2018 2020
Average asking rent ($ p.s.f.)
Direct Sublease

3. Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTDtotal net
absorption
(s.f.)
YTDtotal net
absorption
(% of stock)
Direct
vacancy
(%)
Total
vacancy
(%)
Average
direct asking
rent ($p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Downtown Totals 14,155,081 72,742 60,594 0.4% 21.8% 23.3% $19.80 0 0
Midtown Totals 939,909 32,177 44,276 4.7% 13.8% 14.6% $19.43 0 0
Urban Totals 15,094,990 104,919 104,870 0.7% 21.3% 22.8% $19.79 0 0
East Totals 4,532,252 -56,795 -5,381 -0.1% 12.2% 14.0% $22.74 0 0
Northeast Totals 451,316 144 20,403 4.5% 13.3% 13.3% $15.66 0 0
South Totals 4,746,892 -94,286 -38,510 -0.8% 17.6% 18.1% $18.85 0 0
Southeast Totals 653,559 -5,690 -12,348 -1.9% 9.6% 9.6% $19.49 0 0
Southwest Totals 1,263,133 1,100 269,806 21.4% 15.1% 15.1% $16.97 0 0
West Totals 1,597,216 -15,276 -21,310 -1.3% 18.3% 20.1% $20.48 60,000 20,000
Suburbs Totals 13,244,368 -170,803 212,660 1.6% 15.1% 16.1% $19.91 60,000 20,000
Cleveland Totals 28,339,358 -65,884 317,530 1.1% 18.4% 19.6% $19.83 60,000 20,000
Downtown A 5,723,488 41,034 46,905 0.8% 12.0% 13.2% $25.61 0 0
Midtown A 270,284 0 -11 0.0% 11.3% 11.3% $23.00 0 0
Urban A 5,993,772 41,034 46,894 0.8% 12.0% 13.1% $25.53 0 0
East A 2,232,289 -58,717 -13,791 -0.6% 12.3% 15.5% $25.24 0 0
Northeast A 0 0 0 0.0% 0.0% 0.0% $0.00 0 0
South A 1,675,643 -34,342 -12,796 -0.8% 14.3% 14.3% $22.72 0 0
Southeast A 78,000 0 -6,534 -8.4% 8.4% 8.4% $20.00 0 0
Southwest A 88,000 0 5,605 6.4% 9.7% 9.7% $21.50 0 0
West A 635,254 -24,549 -24,494 -3.9% 24.6% 28.4% $22.81 60,000 20,000
Suburbs A 4,709,186 -117,608 -52,010 -1.1% 14.6% 16.6% $23.63 60,000 20,000
Cleveland A 10,702,958 -76,574 -5,116 0.0% 13.1% 14.6% $24.54 60,000 20,000
Downtown B 8,431,593 31,708 13,689 0.2% 28.4% 30.2% $18.15 0 0
Midtown B 669,625 32,177 44,287 6.6% 14.9% 15.9% $18.60 0 0
Urban B 9,101,218 63,885 57,976 0.6% 27.4% 29.1% $18.17 0 0
East B 2,299,963 1,922 8,410 0.4% 12.1% 12.4% $20.39 0 0
Northeast B 451,316 144 20,403 4.5% 13.3% 13.3% $15.66 0 0
South B 3,071,249 -59,944 -25,714 -0.8% 19.4% 20.2% $17.30 0 0
Southeast B 575,559 -5,690 -5,814 -1.0% 9.8% 9.8% $19.47 0 0
Southwest B 1,175,133 1,100 264,201 22.5% 15.5% 15.5% $16.76 0 0
West B 961,962 9,273 3,184 0.3% 14.1% 14.7% $16.95 0 0
Suburbs B 8,535,182 -53,195 264,670 3.1% 15.3% 15.8% $17.97 0 0
Cleveland B 17,636,400 10,690 322,646 1.8% 21.6% 22.7% $18.10 0 0
Statistics
Note: Updates to the property set were made based on market dynamics. Historical data points included in this report reflect the updated property set.
© 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.
Cleveland Office Outlook
Q3 2020

4. Q3 2020
Construction
Cleveland Office Outlook
1
2
This map highlights a partial list of construction projects. *Since these projects are owner-occupied, they are not tracked in our for-lease office statistics report.
© 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.
2
Development: Swagelok HQ
Square feet: 130,000
Tenant(s): Swagelok
Owner: Swagelok
Construction type: Owner-occupied*
Status: Under construction
Estimated completion: Q2 2021
1
Development: Convergent East
Square feet: 60,000
Tenant(s): IMCD, Chemical Bank
Owner: Equity Trust
Construction type: Spec
Status: Completed
Completed: Q1 2020
4
Development: Sherwin-Williams HQ
Square feet: 1,000,000
Tenant(s): Sherwin-Williams
Owner: Sherwin-Williams
Construction type: Owner-occupied*
Status: Short-term proposed
Construction start: Q1 2021
5
Development: Sherwin-Williams R&D
Square feet: 500,000
Tenant(s): Sherwin-Williams
Owner: Sherwin-Williams
Construction type: Owner-occupied*
Status: Short-term proposed
Construction start: Q1 2021
5
4
3
Development: The Avian
Square feet: 20,000
Tenant(s): TBD
Owner: Hemingway, et al.
Construction type: Spec
Status: Under construction
Estimated completion: Q4 2020
3

5. Q3 2020
Leasing
Cleveland Office Outlook
This dashboard analyzes leasing activity ≥ 5,000 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.
Leasing activity by size
1,315,198
81
530,252
661,917
123,029
750,071
565,127
Growing Shrinking Stable
734,139
581,059
Notable leasing transactions
Onshift 1500 W 3rd St Downtown New lease
TMW Systems 6085 Parkland Blvd East Renewal
Gallagher Sharp 1215 Superior Ave Downtown New lease
Hyster-Yale Materials Handling 5875 Landerbrook Dr East Renewal
Middough Consulting 1901 E 13th St Downtown Renewal
Adcom 1468 W 9th St Downtown New lease
Sherwin-Williams 1660 W 2nd St Downtown Expansion
IMCD 30005 Clemens Rd West New lease
Eagle Family Foods Group 1975 E 61st St Midtown New lease
Weston Hurd 1300 E 9th St Downtown New lease
Growing
Growing
Growing
Shrinking
Growing
Growing
Shrinking
Stable
Stable
Shrinking
65,000
59,804
30,000
29,766
45,449
40,325
40,000
38,000
34,881
31,639
Leasing activity by transaction type
New lease
Renewal
Tenant Address Type FootprintSubmarket Size
Tenant footprint Leasing activity by industry
22 7 52
Class C leasing (s.f.)
Urban leasing (s.f.)
Suburban leasing (s.f.)
Class B leasing (s.f.)
12 months at a glance
Leasing activity (s.f.)
Number of transactions
Class A leasing (s.f.)
55 21 4 1
0
150,000
300,000
450,000
600,000
750,000
5,000-19,999 20,000-39,999 40,000-59,999 60,000+
Total s.f. leased Number of leases#
Leasing activityby submarket (s.f.)
54%
14%
12%
9%
6%
Downtown
East
South
West
Southwest
Northeast
Midtown
Leasing activityby industry (s.f.)
33%
23%
15%
6%
5%
5%
13%
Professional and business services
Financial services
Technology
Construction
Media
Foodandbeverage
Other

6. Q3 2020
Sales
Cleveland Office Outlook
This dashboard analyzes sales activity ≥ 30,000 square feet and ≥ $1.0M 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.
Placeholder
Noteable sales transactions
Size (s.f.) $ p.s.f. Sale date
30,000 $6,000,000 $200 Apr-20
33,000 $4,800,000 $145 Apr-20
462,000 $61,126,154 $132 Nov-19
40,888 $128 Jan-20
57,000 $96 Oct-19
34,710 $3,208,997 $92 Jul-20
46,800 $3,834,003 $82 Jul-20
33,840 $2,650,000 $78 Oct-19
51,000 $3,650,000 $72 May-20
226,000 $13,350,000 $59 Aug-20
Seller
12 months at a glance Sales volume by building type
Total volume ($) $125,086,033
Total volume (s.f.) 1,436,848
Number of transactions 16
Number of investment sales 14
Sales priceBuilding address Buyer
Number of owner-user sales 2
Transactions details
Average price per square footSales volume by submarket (s.f.)
Number of sale-leasebacks 0
1 Allen Bradley Dr ElmTree Funds
24400 Chagrin Blvd
29225 Chagrin Blvd
24200 Chagrin Blvd
Real Life Real Estate
Real Life Real Estate
Real Life Real Estate
Waterstone Property Mgmt.
2033 Crocker Rd Sam G Khouri Stark Enterprises
Rock Creek Business Center
Mohr Captial
23700 Commerce Park Dr
614 W Superior Ave
6500 Rockside Rd
25700 Science Park Dr
6400 Rockside Rd
Real Life Real Estate
Realty Dynamics Equity
Beck Energy
Saber Group
$5,470,000
Beck Energy
Rockefeller Building Associates
Olio Development Group
TransCon Builders Inc.
Orchard's Way Realty
North Pointe Realty Inc.
$5,253,000
Investment Associates
0 200,000 400,000 600,000
East
Downtown
South
Southwest
West
Northeast
Southeast
Midtown
0
600,000
1,200,000
1,800,000
$0
$55,000,000
$110,000,000
$165,000,000
Class A Class B Class C
Total volume ($) Total volume (s.f.)
$0
$30
$60
$90
$120
Class A Class B Class C

7. Q3 2020
Employment
Cleveland Office 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
Professional and Business Services Information
Financial Activities Government
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
*Represents 12-month change in employment. All charts represent the latest economic data available from the Bureau of Labor Statistics as of September 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.
Job growth by sector*Historical employment
Job growth*
Employment by industry Office 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

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.