Cleveland Multifamily Report – Summer 2019

The metro's multifamily sector remained relatively stable in early 2019, with rents increasing 2.4 percent year-over-year through May, just 10 basis points below the national average.
Cleveland rent evolution, click to enlarge
Cleveland rent evolution, click to enlarge

Boosted by the ongoing revival of the urban core and by steady rent gains in workforce housing, Cleveland’s multifamily market remained relatively stable going into 2019, offering predictability to value-add investors, as well as to developers looking to convert and reposition downtown assets. Rents were up 2.4 percent year-over-year through May, just 10 basis points below the U.S. figure and relatively on par with other Midwestern metros—many of which recorded gains in the 2.0 percent to 3.5 percent range.

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Anchored by education and health services, and boosted by job gains in the construction sector, Cleveland’s economy generated 16,200 jobs for an 80-basis-point expansion, just half the national rate. Even so, the metro still has its share of large-scale projects, including Stark Enterprises’ nuCLEus, a $350 million mixed-use development inching closer to breaking ground.

Cleveland sales volume and number of properties sold, click to enlarge
Cleveland sales volume and number of properties sold, click to enlarge

The metro had 3,013 units underway as of May, with a small section of downtown accounting for more than half of the pipeline. Meanwhile, the occupancy rate in stabilized assets remained flat over 12 months, at 94.9 percent as of April. Nonetheless, the 1,577 apartments slated to come online in the second half of the year are set to bring another development cycle peak, putting additional pressure on occupancy rates. Overall, we expect the average Cleveland rent to advance 2.0 percent in 2019.

Read the full Yardi Matrix report.