Cleveland–The Cleveland apartment market, though never really in dire straits, is certainly on the rebound.
For most of 2009, the general Cleveland market, on average, was between 91 and 92 percent, reports George Cvijovic, co-president of Forest City’s Residential Management Group, which has ownership stake in 16,000 units across the Cleveland metro area. He adds that the beginning of 2010 showed the start of an upswing, and in June/July occupancy climbed to between 94 and 96 percent.
Much of this increase in occupancy may be due to fewer people doubling up and people beginning to venture out on their own. Cvijovic, for one, has observed a decrease in availability of one-bedroom units, which, he says, “tells us people are leaving home … and have confidence to do so.”
In addition, from the first quarter 2010 to the second quarter of 2010, net effective rents increased 2 percent, Cvijovic tells MHN. Second quarter year-over-year net effective rents are 300-320 bps higher than they were in 2009.
Meanwhile, assets are trading by the pound, mostly through local buyers. However, because of the nature of the market, Cvijovic notes, “You won’t have equity buying residential but things are trading and quality assets seem to move.”
On that end, Forest City purchased 400 units this year, adding it to a collection of 800 units it already owned in order to create a campus environment. Forest City’s approach is “strategic,” notes Cvijovic, “because it made sense in this crosshairs of a suburb.”
Overall, Cvijovic is optimistic, noting that Cleveland “never lost its values … It’s a stable environment.” The market’s bright spots, according to Cvijovic, include not only its resilience but also the fact that Ford Motor has begun to hire—which, Cvijovic notes, will likely help B properties—as well as the announcement that casinos, and with them jobs, are expected to be brought to the metro in the near future.