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Market Report

Cleveland Office Investment Forecast

2022 Outlook

Dearth of Speculative Deliveries Aids Existing Buildings;
Properties in Eastern Suburbs Still a Buyer Favorite

Developers plan for long-term expansion as demand recovery lags. While Cleveland is projected to continue job growth at a rate on par with some other regional metros, employment recovery still lags far behind the national average. The appearance of new COVID-19 variants could create further challenges for demand, convincing some companies to downsize from current footprints. Despite tepid job growth, large employers are investing heavily in the metro. Sherwin-Williams broke ground in October 2021 on a 600,000-square-foot research and development facility, and plans to begin construction in 2022 on a new corporate headquarters in the CBD. Several other companies are currently engaged in redeveloping corporate properties or moving to new locations within the market. With nearly 1.5 million square feet under development entering 2022, the metro's substantial construction pipeline may weigh on rent growth in the mid-term. However, the large proportion of build-to-suit projects and Cleveland's typically high concentration of removal activity in the office-using sector will help to mitigate downward pressure on rent.

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