Cleveland Office Figures Q4 2022

Market Summary

‒ Cleveland saw multiple move-outs in Q4 2022 as users continued making decisions on hybrid work models and shedding office space. The market experienced negative absorption for the first time in 2022, with -36,104 sq. ft. vacated. However, total year-end absorption was positive at 72,362 sq. ft.

‒ Cleveland houses 14 Class A Prime properties: a specialized class of office buildings including elite amenities and employee experiences. Class A prime buildings demand a 20% rent premium over typical Class A assets. On average, Cleveland prime buildings have 5% lower vacancy than nonprime buildings.

‒ Leasing activity remains strong with over 254K sq. ft. of new leases, renewals, and expansions signed in Q4 2022. Average asking lease rates have increased from $0.03 quarter-over-quarter and $0.14 year-over-year. This can be attributed to the overall cost of projects and the trend toward higher quality office space, which typically demand higher rents.

‒ The overall vacancy rate slightly increased by 40 basis points (bps) to 15.4%. The Northeast submarket holds the lowest vacancy rate at 5.5% and has seen the lowest vacancy rate for the past 8 consecutive quarters.