IRR-Cleveland Mid-Year Viewpoint 2015 Local Market Report - Industrial
Class A industrial space is expected to remain fairly stable in the Cleveland market. Rental rates have remained relatively stable as vacancy rates are decreasing. In addition, the class B & C industrial properties in the market are rebounding as well. Many of the older, less functional buildings are either being razed for prospective development or renovated to accommodate a subsequent user.
Flex buildings have begun to recover as well, due to the fact that many flex building occupants in the Cleveland market are local shop/commercial users and the availability of funding has increased which provides for a larger pool of potential users.
The newer flex buildings are typically located in more outlying, suburban locations where growth is being experienced and there is available land ready for development. Average capitalization rates are anticipated to slowly decrease in the foreseeable future for both industrial and flex properties, although they vary significantly based on location, length of leases, tenant quality and building characteristics. However, we do not anticipate any major fluctuations over the next 1-3 years, with typical variations remaining within the 25-50 basis point range based on the specific property attributes detailed above.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.