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

1. JLL Research
Cleveland | Q4 2020
Office Outlook
An in-depth look at the Cleveland office
market. Analysis includes leasing, sales,
construction and employment.

2. © 2021 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.
Despite the unprecedented nature of 2020, the Cleveland office market closed
out the year relatively unchanged from 2019 levels. Office vacancy in Cleveland
is currently 20.3%, representing a decline of 20 basis points year-over-year.
Strong occupancy gains in Q1 and Q2 were enough to keep absorption positive
for the year, despite an increasing number of givebacks and sublease listings
which became available in Q3 and Q4. Sublease vacancy currently stands at
390,560 s.f., representing an increase of 110,501 s.f. since the shelter-in-place
order was enacted in the spring. While sublease vacancy has increased, the
magnitude of change is much less than what was originally projected during the
early months of the COVID-19 pandemic. Similarly, asking rents have performed
better than forecasted, increasing $0.06 over the course of 2020 to $19.96 p.s.f.
Leasing remains significantly below the historical average as occupiers delay
real estate decisions. Just under 500,000 s.f. of office space was leased in the
second half 2020, which is down 54.6% from the historical average. Negotiating
leverage has shifted to tenants given the level of uncertainty in the office sector.
However, most occupiers have been postponing real estate decisions or signing
short-term renewals to buy more time.
Outlook
Leasing activity will remain muted through the first half of 2021, but transaction
levels are expected to pick up in the second half of the year. Additional sublease
space will likely be added over the next year which will increase overall vacancy
and result in negative absorption. Vacancy in 2021 is likely to increase in the 1%
range. Asking rents may decline, but a decrease of more than 1% is unlikely.
Tenants will continue to hold negotiating leverage and will be greeted with
favorable deal terms if they are willing to commit to long-term leases.
Rents and vacancy hold steady in 2020, but market
conditions are likely to soften modestly in 2021
• Sublease vacancy has increased 110,501 s.f. since the shelter-in-place
order was enacted in the spring. While sublease vacancy has increased, it
remains well below the historical average.
• Negotiating leverage has firmly shifted into the tenant’s favor. However,
most tenants are delaying real estate decisions until there is more clarity
on the future of office space.
• Vacancy in 2021 is likely to increase in the 1% range. Asking rents may
decline, but a decrease of more than 1% is unlikely.
Fundamentals Forecast
YTD net absorption 111,202 s.f. ▼
Under construction 20,000 s.f. ▼
Total vacancy 20.3% ▲
Sublease vacancy 390,560 s.f. ▲
Direct asking rent $19.96 p.s.f. ▼
Sublease asking rent $18.69 p.s.f. ▼
Concessions Rising ▲
-50,000
100,000
250,000
400,000
2016 2017 2018 2019 2020
Supply and demand (s.f.) Net absorption
Deliveries
12%
17%
22%
27%
32%
2008 2012 2016 2020
Total vacancy (%)
$10
$15
$20
$25
2008 2012 2016 2020
Average asking rent ($ p.s.f.)
Direct Sublease

3. Note: Updates to the property set were made based on market dynamics. Historical data points included in this report reflect the updated property set.
© 2021 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.
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 -28,396 -14,667 -0.1% 22.2% 23.9% $19.86 0 0
Midtown Totals 939,909 7,333 51,609 5.5% 13.1% 13.8% $19.29 0 0
Urban Totals 15,094,990 -21,063 36,942 0.2% 21.6% 23.3% $19.83 0 0
East Totals 4,628,258 -82,833 -86,839 -1.9% 13.7% 15.5% $23.06 0 0
Northeast Totals 451,316 7,597 28,000 6.2% 11.6% 11.6% $15.46 0 0
South Totals 4,746,892 -64,448 -106,123 -2.2% 18.9% 19.6% $19.08 0 0
Southeast Totals 653,559 0 -12,348 -1.9% 9.6% 9.6% $19.80 0 0
Southwest Totals 1,263,133 -438 269,368 21.3% 15.2% 15.2% $16.93 0 0
West Totals 1,597,216 -4,490 -17,798 -1.1% 18.3% 19.9% $20.36 60,000 20,000
Suburbs Totals 13,340,374 -144,612 74,260 0.6% 16.0% 17.0% $20.13 60,000 20,000
Cleveland Totals 28,435,364 -165,675 111,202 0.4% 19.0% 20.3% $19.96 60,000 20,000
Downtown A 5,723,488 -5,896 -3,475 -0.1% 12.9% 14.2% $25.62 0 0
Midtown A 270,284 7,333 7,322 2.7% 8.6% 8.6% $23.00 0 0
Urban A 5,993,772 1,437 3,847 0.1% 12.7% 13.9% $25.54 0 0
East A 2,232,289 -35,328 -49,119 -2.2% 14.1% 17.6% $25.67 0 0
Northeast A 0 0 0 0.0% 0.0% 0.0% $0.00 0 0
South A 1,675,643 -9,449 -22,245 -1.3% 14.9% 14.9% $22.68 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 3,478 -13,014 -2.0% 23.4% 26.6% $22.44 60,000 20,000
Suburbs A 4,709,186 -41,299 -85,307 -1.8% 15.4% 17.5% $23.73 60,000 20,000
Cleveland A 10,702,958 -39,862 -81,460 -0.8% 13.9% 15.5% $24.59 60,000 20,000
Downtown B 8,431,593 -22,500 -11,192 -0.1% 28.5% 30.5% $18.16 0 0
Midtown B 669,625 0 44,287 6.6% 14.9% 15.9% $18.53 0 0
Urban B 9,101,218 -22,500 33,095 0.4% 27.5% 29.4% $18.18 0 0
East B 2,395,969 -47,505 -37,720 -1.6% 13.4% 13.6% $20.52 0 0
Northeast B 451,316 7,597 28,000 6.2% 11.6% 11.6% $15.46 0 0
South B 3,071,249 -54,999 -83,878 -2.7% 21.0% 22.1% $17.69 0 0
Southeast B 575,559 0 -5,814 -1.0% 9.8% 9.8% $19.78 0 0
Southwest B 1,175,133 -438 263,763 22.4% 15.6% 15.6% $16.72 0 0
West B 961,962 -7,968 -4,784 -0.5% 14.9% 15.5% $17.15 0 0
Suburbs B 8,631,188 -103,313 159,567 1.8% 16.2% 16.7% $18.18 0 0
Cleveland B 17,732,406 -125,813 192,662 1.1% 22.0% 23.2% $18.18 0 0

4. This map highlights a partial list of office construction projects. *Owner-occupied properties are not included in the for-lease office statistics report.
© 2021 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.
Development: Swagelok HQ
Square feet: 130,000
Tenant(s): Swagelok
Owner: Swagelok
Construction type: Owner-occupied*
Status: Under construction
Estimated completion: Q2 2021
Development: Convergent East
Square feet: 60,000
Tenant(s): IMCD, Chemical Bank
Owner: Equity Trust
Construction type: Spec
Status: Completed
Completed: Q1 2020
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: Q3 2021
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: Q3 2021
Development: The Avian
Square feet: 20,000
Tenant(s): TBD
Owner: Hemingway, et al.
Construction type: Spec
Status: Under construction
Estimated completion: Q1 2020

5. This dashboard analyzes leasing activity ≥ 5,000 square feet over a 12-month period, ending December 31, 2020.
© 2021 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
1,163,006
72
542,002
519,575
101,429
680,652
482,354
Growing Shrinking Stable
524,075
638,931
Notable leasing transactions
Ulmer & Berne 1660 W 2nd St Downtown Extension
TMW Systems 6085 Parkland Blvd 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
Falls Digital 50 Public Sq Downtown Renewal
Weston Hurd 1300 E 9th St Downtown New lease
United States GSA 1001 Lakeside Ave Downtown Extension
KPL Management 14600 Detroit Ave West New lease
12 months at a glance
Leasing activity (s.f.)
Number of transactions
Class A leasing (s.f.)
Class C leasing (s.f.)
Urban leasing (s.f.)
Suburban leasing (s.f.)
Class B leasing (s.f.)
Tenant footprint Leasing activity by industry
18 6 48
Leasing activity by transaction type
New lease
Renewal
Tenant Address Type FootprintSubmarket Size
86,956
59,804
28,704
28,000
40,000
38,000
34,881
31,639
31,000
29,766
Stable
Shrinking
Shrinking
Growing
Growing
Growing
Shrinking
Stable
Stable
Growing
53 16 2 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.)
57%
12%
10%
10%
8%
Downtown
South
West
East
Southwest
Midtown
Northeast
Leasing activityby industry(s.f.)
39%
23%
14%
9%
6%
5% 4% Professional and business services
Financial services
Other
Technology
Media
Construction
Nonprofit

6. This dashboard analyzes sales activity ≥ 30,000 square feet and ≥ $1.0M over a 12-month period, ending December 31, 2020.
© 2021 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
40,888 $128 Jan-20
34,710 $3,208,997 $92 Jul-20
46,800 $3,834,003 $82 Jul-20
51,000 $3,650,000 $72 May-20
226,000 $13,350,000 $59 Aug-20
34,620 $1,250,000 $36 Jun-20
53,000 $1,825,000 $34 Jan-20
Seller
12 months at a glance Sales volume by building type
Total volume ($) $54,339,879
Total volume (s.f.) 851,925
Number of transactions 12
Number of investment sales 10
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
24400 Chagrin Blvd
Saber Group
Real Life Real Estate
Real Life Real Estate
Waterstone Property Mgmt.
2033 Crocker Rd Sam G Khouri Stark Enterprises
Rock Creek Business Center
Orchard's Way Realty24200 Chagrin Blvd Real Life Real Estate
29225 Chagrin Blvd
1900-1940 E 6th St
25700 Science Park Dr
614 W Superior Ave
20820 Chagrin Blvd
Realty Dynamics Equity
Linkmedia 360
Bethany Marshall J. Scott Scheel
23700 Commerce Park Dr
Cellular Technology Ltd.
Rockefeller Building Associates
Beck Energy
$5,253,000
Investment Associates
North Pointe Realty Inc.
0 200,000 400,000
East
Downtown
South
Southwest
West
Northeast
Southeast
Midtown
0
600,000
1,200,000
1,800,000
$0
$15,000,000
$30,000,000
$45,000,000
Class A Class B Class C
Total volume ($) Total volume (s.f.)
$0
$30
$60
$90
$120
Class A Class B Class C

7. 0
200,000
400,000
600,000
800,000
1,000,000
2010 2012 2014 2016 2018 2020
© 2021 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.
Historical sublease vacancy (s.f.)
Sublease availability by size (# of availabilities)
Available sublease space by submarket (s.f.)
0 80,000 160,000 240,000
Downtown
East
West
South
Midtown
Northeast
Southeast
Southwest
2 spaces
6 spaces
1 space
6 spaces
12 spaces
9 spaces
≥ 25,000 s.f.
20,000-24,999 s.f.
15,000-19,999 s.f.
10,000-14,999 s.f.
5,000-9,999 s.f.
< 5,000 s.f.
Sublease availability by lease expiration (s.f.)
Sublease space added by quarter (s.f.)
0
40,000
80,000
120,000
Q1
'18
Q2 Q3 Q4 Q1
'19
Q2 Q3 Q4 Q1
'20
Q2 Q3 Q4
0
30,000
60,000
90,000
120,000
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
Current sublease availabilities 36
Available sublease space 390,560 s.f.
Sublease vacancy 1.4%
Sublease rent discount 11.2%
Median sublease size 6,939 s.f.
Average remaining lease term 58 months
Fundamentals

8. 6.7%U.S. unemployment
-6.9%U.S. 12-month job growth
5.8%Cleveland unemployment
-8.3%Cleveland 12-month job growth
5.7%Ohio unemployment
-6.0%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%13%
12%
8%
6%
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Mining, Logging & Construction
Other Services
Information
0%
8%
16%
24%
850,000
950,000
1,050,000
2016 2017 2018 2019 2020
Employment Unemployment
-26,000
-18,000
-14,700
-12,000
-10,000
-5,600
-2,700
-2,600
-800
2,600
-50,000 -40,000 -30,000 -20,000 -10,000 0 10,000
Leisure & Hospitality
Professional & Business Services
Educational & Health Services
Trade, Transportation & Utilities
Government
Manufacturing
Financial Activities
Other Services
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 December 2020.
© 2021 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*
Job growth by sector*Historical employment
Office employment*Employment by industry

9. 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
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© 2021 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.