Cleveland Office Market
The Cleveland office market accrued 252,729 SF of positive absorption in the first quarter of 2025, giving it four quarters in a row in the positive. The positive absorption caused the quarterly overall total vacancy rate to decrease to 22.7%, down 50 basis points from the prior quarter. Total first quarter 2025 leasing activity for non-owner-occupied office buildings measuring 10,000 SF and greater in the Cleveland MSA was 240,121 SF, the second lowest quarterly total in the last 16 years behind the fourth quarter of 2021’s tally of 196,850 SF. The 16-year annual leasing activity average was 2.3 million SF. The quarterly total overall average asking rental rate increased by $0.33/SF from the fourth quarter of 2024 to $21.11/SF in the first quarter of 2025. As a result, the 2025 year-to-date average asking rent total was higher than the 2024 total by $0.59/SF, though the year-over-year asking rent growth rate dipped to 2.9%.
Download Cleveland Office Market Report 1Q25Cleveland Industrial Market
The Cleveland industrial market tallied negative 51,772 SF of absorption in the first quarter of 2025, coming off a year-end total for 2024 that was just north of positive 1.4 million SF. The industrial vacancy rate ticked up 20 basis points to 4.2% in the first quarter from the fourth quarter of 2024. Year-to-date for 2025, the market stood at 4.2% vacancy, up from the overall 4.0% in 2024 but still well below the long-term average vacancy trendline of 7.4%. In the first quarter of 2025, the quarterly demand for industrial space reached its lowest level in recent history, which was 922,644 SF, a decrease from 2.2 million SF in the previous quarter, and the first level under 1.0 million SF in at least 25 years. The pipeline of properties under construction decreased to approximately 2.4 million SF in the first quarter of 2025, comprising 0.8% of the overall inventory, down 10 basis points from the previous quarter. In fact, over 80% of the projects that are currently underway are either owner-built or build-to-suit projects. Industrial direct average asking rents contracted year-over-year in the first quarter of 2025 by negative 2.8%. The first quarter saw a direct average asking rent of $6.02/SF, which was down by $0.17/SF from the previous overall year total and was down by $0.03/SF from the previous quarter. Quarterly rent growth has seen a downward trend since a peak in 2022.
Download Cleveland Industrial Market Report 1Q25