Is a new industrial revolution taking place in Cleveland? A report from CBRE says there is, and that’s good news for the region’s commercial real estate market.
According to the CBRE report, much of this revolution is being fueled by a workforce that is becoming increasingly educated. It’s resulted in an increase in the number of patents being filed out of the Cleveland area and a boom in data centers and flexible space.
CBRE says that between 2008 and 2017 companies and organizations in the greater Cleveland area generated a total of 7,605 patents. A total of 60 percent of these patents have been granted in the last five years.
These patents are focusing on a wide range of industries, everything from FinTech to BioTech. As CBRE says in its report, software developers have become the new factory workers in Cleveland, helping to transform the city into a center for innovation.
This focus on technology is having an impact on the region’s commercial real estate market. CBRE reports that large data centers, attracted to Cleveland’s affordable energy costs and growing healthcare and biotechnology sectors, are locating in Northeast Ohio. Companies from outside the area are acquiring data centers in Cleveland, too, as the cost of doing this in primary markets continues to rise.
An example? H5 Data Center in 2017 purchased the 300,000-square-foot Cleveland Data Center, pointing to the city’s location between Chicago and the major cities on the East Coast as the reason. This makes sense: Cleveland is a day’s drive from 60 percent of the country’s population.
The rise in technology here has also resulted in an increased demand for flexible space. Cleveland, like many large cities across the country, is seeing an influx of co-working space, spaces that are filling a variety of neighborhood and building types. In the last three years, downtown Cleveland has added more than 53,000 square feet of flexible space to its inventory.
Cleveland is also benefitting today from an educated and skilled workforce, CBRE says in its report. CBRE points to Case Western Reserve University as an example: This university, located in Cleveland’s University Circle neighborhood, ranks 13th in the country in translating research breakthroughs into commercial success. This puts Case Western ahead of Harvard, Georgia Tech and the University of Chicago. The university also ranked sixth nationally in the number of patents per 1,000 students.
The future looks bright, too, for Cleveland’s higher-education system. CBRE said that in 2018, Case Western Reserve University and Cleveland State University received a $1.75 million grant to establish the Internet of Things Collaborative.
And finally? CBRE ranks Cleveland 10th on its list of U.S. cities with the highest growth in the number of software developers from 2013-2017. Madison, Wisconsin, leads that list. The only other Midwest city on the list besides Cleveland and Madison is Nashville.