A challenging year. That’s how 2022 will go down for Cleveland’s office market.
Newmark recently released its fourth quarter 2022 office report for the Cleveland market. And as expected, the report showcases an office sector that is still in limbo as companies continue to finalize their back-to-the-office plans.
According to Newmark’s report, the Cleveland office market saw negative absorption, both for the fourth quarter of 2022 and for the entire year. Vacancies rose, too.
Newmark reported that the Cleveland office market’s vacancy rate rose to 19.8% in the fourth quarter, ending the year on an uncertain note. That rate jumped from 18.2% in the third quarter.
The market also saw 606,389 square feet of negative absorption during the quarter, the largest negative absorption total in the Cleveland office market in 20 years.
Overall, the Cleveland office market gave back more space than it filled in 2022, with Newmark reporting that the local office market recorded a total of 648,046 square feet of negative absorption in 2022. In eight of the last 10 quarters, incuding the last three consecutive ones, the Cleveland office market experienced negative absorption.
The average asking rental rate for local office space did increase slightly in the fourth quarter, jumping 22 cents a square foot to $18.82 a square foot. In a bit of good news, that figure is the highest it’s been since the second quarter of 2003, when the average asking rent hit $18.95 a square foot.
