Cleveland Retail Investment forecast
Preleasing Activity Shows Demand For Quality Space;
High-Credit Tenants Drawing Buyer Focus
Elevated consumer spending and a relaxed pipeline bolster fundamentals. Cleveland reported steady growth in retail sales since the third quarter of 2020, and is expected to maintain a stable upward trajectory throughout this year. While sales volume has moved above pre-pandemic totals, the metro's job sector is projected to undergo a more prolonged recovery. Employment totals will end this year roughly 40,000 positions short of levels immediately prior to the health crisis. In addition, responses toward the emergence of new COVID-19 strains may alter hiring velocity, particularly among retailers located near the urban core that rely on commuter foot traffic. While challenges remain, muted development activity will benefit the market's currently vacant stock. After finalizing a record-low volume of retail square footage last year, builders are projected to maintain a restrained construction schedule, with few speculative deliveries slated for 2022. Cleveland boasts the highest pre-leasing rates among major Ohio metros, with tenants committed to 98 percent of projects in the current pipeline at the beginning of this year. Additionally, the metro enters the year with vacancy at 4.9 percent, well below the long-term average.