Cleveland’s 175-million- square-foot warehouse/ distribution market finished the second quarter of 2012 with a vacancy rate of 10.3%, down 60 basis points over 12 months and 10 over the quarter. The rate declined 20 basis points by August. Reis’ latest construction data report the completion of the expansion of the Vitamix warehouse/distribution facility in Lorain County in June. Although there is no construction to speak of, net absorption totals 926,000 square feet through the second quarter. Demand has been and remains strong. Reis reports average asking and effective rents of $4.03 psf and $3.79 psf, both up 0.8% for the quarter and 1.3% and 1.6%, respectively, for 12 months. August data show no change. A year-end rate of 17.5% is forecast
For 11.2 million square feet of Flex/R&D space, Reis reports a vacancy rate of 17.4% for second quarter, down 20 basis points for the quarter and down 140 over 12 months. August data show an increase to 18.3%. Second quarter net absorption was positive at 12,000 square feet, bringing the year-to-date total to 109,000 square feet. There is no Flex/R&D space under construction and none is forecast to complete through 2013. Reis reports second quarter 2012 asking and effective rents of $7.09 psf and $6.64 psf, unchanged over the quarter, and up 1.4% and 1.8% over 12 months. Rents gained considerable ground in the first quarter after a poor showing in 2011. August data show asking and effective rents down 0.2% and 0.4%, respectively, from second quarter levels. Solid, if modest gains of 2.0% for both rental categories are forecast for 2012.
In their second quarter 2012 report, Cushman & Wakefield states that “the Greater Cleveland industrial market ended the second quarter 2012 with another decrease in the overall vacancy rate, adjusting to 8.3% as compared to 8.5% at the end of the first quarter 2012 and 9.6% at the end of the second quarter 2011.” The direct asking rent of $3.72 psf is unchanged over 12 months.