Low vacancy rates and continued strong demand from renters. That’s how Marcus & Millichap describes the Cleveland-area multifamily market in its latest research report.
According to Marcus & Millichap’s Cleveland Multifamily Investment Forecast Report for 2025, the multifamily market in this city and its suburbs remains a strong one. Investors are still eager to sink their dollars in Cleveland-area apartment developments. And renters are still flocking to multifamily units here.
“Cleveland’s multifamily market continues to present strong investment opportunities, with high yields and competitive entry costs attracting both local and out-of-state buyers,” said Grant Fitzgerald, vice president and regional manager with the Cleveland office of Marcus & Millichap. “The city’s sustained demand for affordable housing and strategic development projects positions it for long-term growth.”
Some of the key trends identified by Marcus & Millichap for this market include:
•Six of Cleveland’s nine suburban submarkets maintained vacancy rates below 5%, while major downtown projects like Sherwin-Williams’ headquarters and a $3.5 billion riverfront development are expected to drive long-term housing demand in the center of the city.
•Investor Demand: Cleveland remains one of the most attractive multifamily investment markets in the country, ranking second in both highest average cap rate and lowest per-unit sale price among major U.S. metropolitan areas, according to Marcus & Millichap’s report.
•Class-C Performance: Affordable housing continues to thrive, with Class-C apartments recording a 4.8% vacancy rate — well below the national average — driven by strong absorption in stable submarkets like South Cleveland.
•Construction and Vacancy Outlook: Multifamily deliveries in the Cleveland market will reach their highest level since 2018, with about 1% inventory growth. However, vacancy rates are expected to rise slightly to 5.8% as new units outpace absorption.
•Rent Growth: Cleveland’s 15-year streak of annual rent growth will continue in 2025, with Marcus & Millichap forecasting that the average effective rent will rise to $1,320 a month, an increase of 21% over 2021 levels.
“Cleveland is a fantastic apartment market because there is balanced supply and demand, inherently affordable rents for renters and strong yield for investors” Fitzgerald said. “Because of these and other factors, we have seen Cleveland be a strong investment market for multifamily in both good and bad macroeconomic environments.”
