Finding modern industrial space in the Cleveland market has become a challenge, as vacancy rates here remain at historic lows, according to the latest research from Newmark Knight Frank.
Newmark reported that despite a first quarter that actually saw negative absorption, industrial vacancy rates in the Cleveland market remained at 5.8 percent. That ranks as a historic low.
How did this happen despite 96,545 square feet of negative absorption during the first quarter, especially considering that this marked the fourth consecutive quarter of negative absorption? Newmark Knight Frank pointed to the 18 consecutive quarters before this stretch, all of which featured positive industrial absorption.
Newmark reported that during the last two years, the industrial vacancy rate in the Cleveland market dropped 110 basis points, hitting its new low after standing at 6.9 percent in the first quarter of 2016.
This vacancy drop came even though the market added nearly 1.3 million square feet of new industrial product since 2016. A total of 135,000 square feet of this new product came online during the first quarter of this year, helping to explain the negative absorption seen during this period.
Demand, then, remains strong. Evidence for this? Newmark said that nearly 2 million square feet of new industrial construction is now underway in the Cleveland market.
The message is clear: The industrial market in Cleveland, as it is across most of the United States, remains strong as 2018 moves toward its second half.