Despite the turmoil caused by the COVID-19 pandemic, Cleveland’s industrial market posted its lowest ever vacancy rate in the fourth quarter of 2020.
That’s just one piece of good news in Newmark Knight Frank’s fourth quarter Cleveland industrial market report. According to the report, the vacancy rate in the industrial market in the greater Cleveland area dropped 30 basis points in the fourth quarter, hitting 5.1 percent. That’s the lowest the vacancy rate has been in this market, at least during the 20 years in which vacancies have been tracked here.
The industrial vacancy rate has remained under 6 percent in the Cleveland area for the last 13 quarters, dating back to the fourth quarter of 2017.
And there was more good news in the report. The fourth quarter also saw the greater Cleveland industrial market post positive absorption for the fourth quarter in a row, with more than 1.29 million square feet of industrial space absorbed. That is the third-highest amount of absorption that the industrial market has seen in the last 10 years.
According to Newmark Knight Frank, the Cleveland industrial market saw net positive absorption of more than 1.75 million square feet for the entirety of 2020. That’s a healthy jump from 2019’s 747,892 square feet of positive absorption.
Newmark reported that the industrial market remained healthy all year, showing no meaningful signs of crumbling even during the worst days of the COVID-19 pandemic.
The local industrial market celebrated a particularly big deal to mark the end of 2020. As Newmark reports, in early December Plymouth Industrial REIT purchased a 10-building, 2.1-million-square-foot portfolio spanning the Ohio cities of Akron, Canton and Stow.
The REIT purchased this portfolio for about $94 million, or about $44 a square foot. The Summit and Stark county assets were 98 percent leased at the time of sale to 15 tenants from a variety of industries.
The area’s Southwest market saw a big industrial deal, too, with the transfer of the 100,301-square-foot warehouse in Brunswick, Ohio. The property, built in 2000, sold for $4.9 million to ID Images.
The Southeast submarket had a strong year, too, posting 954,876 square feet of absorption in the fourth quarter, leading to a year-end total of more than 1.235 million square feet of absorption in this slice of the Cleveland market. One of the biggest deals? Amazon leased a 434,000-square-foot warehouse in the community of Glenwillow in the second quarter. An affiliate of global real estate investor Investcorp purchased the building as part of a $280 million, 32-property portfolio transaction spanning several Midwest cities. This property, within that deal, transferred for more than $50 million, or $115 a square foot.
Also in the Southeast submarket, the 195,093-square-foot facility in Solon, Ohio, transferred as an investment to AIC Ventures for $11.2 million or $57 a square foot.