Demand Dampens Amid Building Surge in Cleveland
Although underperforming against the U.S. average, the area's multifamily market remains stable, fueled by the revitalization of the city’s core.
By Bogdan Odagescu
Cleveland rent evolution, click to enlarge
Although underperforming against the U.S. average, Cleveland-Akron’s multifamily market remains stable, fueled by the revitalization of the city’s core. Year-over-year rent growth started 2018 at 1.0 percent, heavily trailing the 2.8 percent national rate, as the metro’s population continues to dwindle, despite downtown’s continued growth.
Even though consistent gains in education and health services (6,300 jobs), manufacturing (2,000) and construction (1,800) have made up for losses in professional and business services (-4,600), leisure and hospitality (-2,300) and government (-1,800), Cleveland’s economy is tough to pin down. Cleveland Clinic, which employs roughly 50,000 people and once again expanded last year, remains Northeast Ohio’s main anchor. The metro has notable projects underway, including two Amazon facilities and the renovation of Quicken Loans Arena. At the same time, Cleveland has other large developments in the planning and permitting phases, such as Playhouse Square Foundation’s 34-story high-rise and Stark Enterprises’ $540 million mixed-use project.
Some 1,700 units came online in the metro last year and about 2,000 are scheduled for delivery in 2018, which would mark a new cycle high. The construction surge of the last three years has tempered demand, especially at the higher end of the quality spectrum. However, we expect demand to remain steady, pushing rents up 2.0 percent in 2018.
