The Cleveland industrial market is a hot one today, with vacancies under 5 percent in most submarkets. This is a good news. But it also presents certain challenges. Midwest Real Estate News recently spoke with David Stover, principal and executive managing director with Cleveland’s Hanna Commercial Real Estate, about this strong and steady sector.
Stover will be one of the featured speakers at tomorrow’s 4th Annual Cleveland Commmercial Real Estate Summit held by REJournals at Windows on the River in Cleveland. If you want to hear more from Stover and other CRE pros about the Cleveland, be sure to attend this industry event.
Midwest Real Estate News: In general, how strong is the Cleveland industrial market today?
David Stover: This is my 30th year in commercial real estate. I’d say the industrial market in Cleveland today is pretty strong. We don’t get too hot like the bigger markets, places like Chicago. But we also don’t get too cold here. I would say that our market right now is very healthy. Our vacancy rate is 5 percent or less. That is very low. So this is a good time for the Cleveland industrial market.
MREN: With the vacancy rate for industrial product being so low, is it challenging for potential tenants to find the space they are looking for here?
Stover: As a broker, the challenge I have is that there is not a lot of product to offer to my clients. Most of our new industrial construction is build-to-suit. There is not a lot of spec building right now. Amazon is building an 850,000-square-foot facility in the market and another 650,000-square-foot foot building. Those are two big buildings going up. But it’s hard to find warehouse space here, especially for clients that are looking to purchase something.
MREN: What do you tell clients who are looking for that modern industrial space here?
Stover: I tell them that they have to be patient. You can’t get exactly what you want right now. You might have to convert an older property. You might have to choose a different location. It really is about patience right now. People might have to wait a bit longer to find the location that works best for them. Or they might have to operate out of multiple facilities.
MREN: Operating out of multiple facilities, is that a common solution to the lack of space today?
Stover: We have a client now that is in four locations. We are trying to put them in one location. Their current set-up is not ideal for them. They need more space. They should be under one roof. But they are waiting for the right location.
MREN: Are there any submarkets in the Cleveland area that are particularly hot right now?
Stover: Not really. It seems like the whole market overall is in good shape. There isn’t one submarket that is really hot, but none of them are cold, either. The area in general is doing very well.
MREN: Are there any features or amenities that clients today must have when it comes to modern industrial space?
Stover: Ceiling heights is the big must-have today. Most of the older buildings have ceiling heights that are 24 feet. The newer buildings, though, are all 30-foot clear or higher. It all comes down to height. The cities all want new industrial space to have ESFR sprinkler systems, so that’s an important feature. The new buildings have greater heights and greater sprinkler densities.
For more informaition about Stover and the other presenters at REJournals’ Cleveland Commercial Real Estate Summit, click here.