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

1. JLL Research
Cleveland | Q2 2018
Office Outlook
An in-depth look at the Cleveland office
market. Analysis includes leasing, sales,
construction and employment.

2. Q2 2018
Insight
Cleveland Office Outlook
Downtown Cleveland has undergone a transformation over the last five years,
one that has been well documented in the national media. Dozens of new
restaurants have opened, several new hotels have been built, and downtown
has welcomed close to 5,000 new residents. Companies have taken notice,
and the market has seen a steady procession of office tenants relocate to the
central business district. As a result, office vacancy has declined and market
conditions downtown have shifted from tenant-favorable to a neutral state.
This trend has been intensified by the conversion of 3.6 million square feet of
underperforming office buildings to residential use. While conditions have
tightened, opportunities for office users still exist across the quality spectrum.
Despite the recent run-up downtown, the suburbs remain the principal
corporate address, home to 81.0 percent of the region’s headquarters. One of
the most prevailing trends of this cycle has been the flight to quality, as
businesses invest in the workplace as a means to attract and retain top talent.
As evidence, six corporate headquarters have been constructed in the
suburbs since 2012 totaling 1.6 million square feet. Speculative developers
have also been accommodating the flight to quality trend, delivering 300,000
square feet of new multi-tenanted office space over the last year.
Outlook
Office vacancy in Cleveland currently stands at 19.3 percent and will likely end
2018 unchanged due to the speculative office developments completed
earlier this year. Taking a longer-term view, we see vacancy declining at a
modest rate of 1.0 percent annually for the next few years. Rents are projected
to appreciate annually in the 2.0 percent range as the market tightens and
owners upgrade assets. The construction forecast is limited. However, several
proposed projects could kick off with the signing of an anchor tenant. All in
all, the Cleveland office market will remain favorable for corporate users with
affordable rents and ample opportunities across the metro.
Urban migration, flight to quality are trends to watch
21.7%
21.3%
19.7% 19.5%
2015 2016 2017 Q2 2018
Total vacancy
$16.00
$19.00
$22.00
$25.00
2015 2016 2017 Q2 2018
Average asking rents ($/s.f.) Class A
Class B
Top trends
• Downtown Cleveland has undergone a transformation and the market
has seen a procession of office tenants relocate to the urban core.
• Flight to quality has been a dominant trend this cycle, as businesses
invest in the workplace as a means to attract and retain top talent.
• Looking forward we see vacancy steadily declining with rent growth
averaging 2.0 percent annually. New construction will be limited.
© 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.
Fundamentals Forecast
YTD net absorption 279,773 s.f. ▶
Under construction 0 s.f. ▶
Total vacancy 19.5% ▼
Average asking rent (gross) $19.76 p.s.f. ▲
Concessions Declining ▼
-350,000
-175,000
0
175,000
350,000
2015 2016 2017 YTD 2018
Supply and demand (s.f.) Net absorption
Deliveries

3. 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.
© 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.
Cleveland Office Outlook
Q2 2018
Class
Inventory
(s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total 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 14,405,369 141,264 162,310 1.1% 18.8% 19.4% $19.63 0 0
Midtown Totals 1,026,478 14,164 123,683 12.0% 17.0% 17.8% $20.25 91,000 0
Urban Totals 15,431,847 155,428 285,993 1.9% 18.6% 19.3% $19.66 91,000 0
Northeast Totals 399,075 5,149 12,764 3.2% 23.9% 23.9% $15.83 0 0
East Totals 3,992,843 7,294 30,463 0.8% 16.8% 19.1% $24.40 220,000 0
Southeast Totals 653,559 18,832 16,453 2.5% 18.4% 18.4% $18.80 0 0
South Totals 4,788,334 -11,339 -21,378 -0.4% 18.2% 18.7% $18.84 0 0
Southwest Totals 1,022,714 13,537 22,521 2.2% 30.5% 30.5% $18.13 0 0
West Totals 1,532,913 -49,491 -67,043 -4.4% 17.5% 17.5% $17.29 0 0
Suburban Totals 12,389,438 -16,018 -6,220 -0.1% 18.9% 19.8% $19.88 220,000 0
Cleveland Totals 27,821,285 139,410 279,773 1.0% 18.7% 19.5% $19.76 311,000 0
Downtown A 5,854,816 99,375 84,281 1.4% 11.2% 12.1% $24.00 0 0
Midtown A 262,356 25,934 33,807 12.9% 17.6% 20.9% $23.00 61,000 0
Urban A 6,117,172 125,309 118,088 1.9% 11.5% 12.5% $23.94 61,000 0
East A 2,069,271 21,452 27,564 1.3% 19.2% 23.3% $27.62 220,000 0
Southeast A 78,000 0 0 0.0% 0.0% 0.0% $0.00 0 0
South A 1,675,643 -17,678 -9,250 -0.6% 16.4% 17.6% $22.68 0 0
Southwest A 88,000 0 0 0.0% 16.1% 16.1% $0.00 0 0
West A 594,777 -56,375 -37,053 -6.2% 15.2% 15.2% $17.10 0 0
Suburban A 4,505,691 -52,601 -18,739 -0.4% 17.2% 19.6% $24.50 220,000 0
Cleveland A 10,622,863 72,708 99,349 0.9% 13.9% 15.5% $24.23 281,000 0
Downtown B 8,550,553 41,889 78,029 0.9% 23.9% 24.4% $18.39 0 0
Midtown B 764,122 -11,770 89,876 11.8% 16.8% 16.8% $19.26 30,000 0
Urban B 9,314,675 30,119 167,905 1.8% 23.3% 23.8% $18.43 30,000 0
Northeast B 399,075 5,149 12,764 3.2% 23.9% 23.9% $15.83 0 0
East B 1,923,572 -14,158 2,899 0.2% 14.3% 14.5% $20.06 0 0
Southeast B 575,559 18,832 16,453 2.9% 20.9% 20.9% $18.80 0 0
South B 3,112,691 6,339 -12,128 -0.4% 19.2% 19.3% $17.75 0 0
Southwest B 934,714 13,537 22,521 2.4% 31.9% 31.9% $17.97 0 0
West B 938,136 6,884 -29,990 -3.2% 19.0% 19.0% $17.38 0 0
Suburban B 7,883,747 36,583 12,519 0.2% 19.8% 20.0% $18.06 0 0
Cleveland B 17,198,422 66,702 180,424 1.0% 21.7% 22.0% $18.27 30,000 0

4. Q2 2018
Construction
Cleveland Office Outlook
1
Development: Link 59
Square feet: 60,000
Tenant(s): MCPc, et al.
Owner: Hemingway
Construction type: Spec
Completion: Q2 2018
1
2
Development: Phoenix Building
Square feet: 30,000
Tenant(s): Infinite Arthroscopy, et al.
Owner: Hemingway
Construction type: Spec
Completed: Q2 2018
3
4 5
3
Development: Pinecrest
Square feet: 150,000
Tenant(s): Alliance Prime, et al.
Owner: Fairmount
Construction type: Spec
Completed: Q2 2018
4
Development: Van Aken
Square feet: 66,000
Tenant(s): ABA, RMS, et al.
Owner: RMS
Construction type: Spec
Est. completion: Q2 2018
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.
5
Development: Highlands Center
Square feet: 47,000
Tenant(s): Glenmede, et al.
Owner: Palmieri
Construction type: Spec
Completion: Q4 2017
2
1
Development: Link 59
Square feet: 61,000
Tenant(s): MCPc, et al.
Owner: Hemingway
Construction type: Spec
Completed: Q2 2018
4
Development: Van Aken
Square feet: 64,000
Tenant(s): ABA, RMS, et al.
Owner: RMS
Construction type: Spec
Completed: Q2 2018

5. Q2 2018
Leasing
Cleveland Office Outlook
This dashboard analyzes leasing activity ≥ 5,000 square feet over a 12-month period, ending June 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.
Leasing activity by size
1,306,891
89
511,945
719,254
75,692
850,696
456,195
Growing Shrinking Stable
754,320
552,571
Notable leasing transactions
Submarket Size
The Revenue Group 3711 Chester Ave Midtown
Cleveland-Cliffs 200 Public Sq CBD
Western Reserve 1701 E 12th St CBD New lease Stable
S&P Data 1500 W 3rd St CBD Renewal Growing
Electronic Merchant Systems 250 W Huron Rd CBD New lease Growing
HIMSS 1 Saint Claire Ave CBD Renewal Stable
Hyster-Yale Materials Handling 5875 Landerbrook Dr East New lease Stable
Bank of America 1375 E 9th St CBD Renewal Growing
Cleveland Cavaliers 250 W Huron Rd CBD New lease Stable
RSM 1001 Lakeside Ave E CBD Renewal Stable
43,000
32,817
29,946
25,753
57,000
46,000
45,000
43,000
69,223 New lease Growing
63,886 Renewal Shrinking
Leasing activity by transaction type
New lease
Renewal
Tenant Address Type Footprint
Tenant footprint Leasing activity by industry
12 4 73
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.)
26%
25%16%
11%
9%
7%
6%
Professional and business services
Financial services
Scientific and technical
Public and private institutions
Legal services
Real estate
Other
73 9 5 2
0
150,000
300,000
450,000
600,000
750,000
5,000-19,999 20,000-39,999 40,000-59,999 60,000-79,999
Total s.f. leased Number of leases#
Leasing activityby submarket (s.f.)
55%
11%
10%
9%
6%
CBD
South
Midtown
East
West
Southeast
Northeast
Southwest
Leasing activityby industry (s.f.)

6. Q2 2018
Employment
Cleveland Office Outlook
4.1%U.S. unemployment
1.7%U.S. 12-month job growth
5.6%Cleveland unemployment
0.1%Cleveland 12-month job growth
4.7%Ohio unemployment
0.4%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.
3,800
1,800
400
200
100
-100
-200
-800
-1,600
-2,600
-4,800-3,800-2,800-1,800 -800 200 1,200 2,200 3,200 4,200
Manufacturing
Trade, Transportation & Utilities
Financial Activities
Educational & Health Services
Government
Information
Other Services
Mining, Logging & Construction
Professional & Business Services
Leisure & Hospitality
0%
4%
8%
12%
900,000
1,000,000
1,100,000
2014 2015 2016 2017 2018
Employment Unemployment
19%
18%
14%13%
12%
9%
7%
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Other Services
Mining, Logging & Construction
Information
* Represents 12-month change in employment. All charts represent the latest economic data available from the Bureau of Labor Statistics as of June 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 Office employment*
-3,000
0
3,000
6,000
2014 2015 2016 2017 2018
Professional & Business Services Information
Government Financial Activities

7. Andrew Batson
Vice President, Director of 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.
About JLL
JLL (NYSE: JLL) is a leading professional services firm that
specializes in real estate and investment management. A
Fortune 500 company, JLL helps real estate owners,
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
trademark, of Jones Lang LaSalle Incorporated. For further
information, visit www.jll.com.
About JLL Research
JLL’s research team delivers intelligence, analysis and
insight through market-leading reports and services that
illuminate today’s commercial real estate dynamics and
identify tomorrow’s challenges and opportunities. Our more
than 400 global research professionals track and analyze
economic and property trends and forecast future
conditions in over 60 countries, producing unrivalled local
and global perspectives. Our research and expertise, fueled
by real-time information and innovative thinking around the
world, creates a competitive advantage for our clients and
drives successful strategies and optimal real estate
decisions.