Cleveland’s industrial sector is showing signs of softening, though fundamentals remain relatively tight. Availability has edged higher and net absorption turned negative at –939,468 square feet, marking the fourth consecutive quarter of decline, yet the vacancy rate remains low at 4.4%, well below the national average. Limited construction over the past five years has constrained supply, weighing on leasing activity as new lease volume declined sharply.
Demand is concentrated among smaller manufacturers, with over 90% of new leases under 25,000 square feet, making the market more sensitive to cost pressures and tariffs. Rent growth has slowed to 2.3% year-over-year, but restrained development and scarce large-bay space should help maintain balanced conditions near term.
Key Findings
- Cleveland recorded its fourth consecutive quarter of negative net absorption, yet vacancy remains low at 4.4%, well below the national average, supported by limited new construction.
- Industrial inventory has grown just 1.6% since 2020 versus 11.2% nationally, with only 0.3% of inventory currently under construction.
- Sales volume reached $351 million throughout 2025, although institutional participation fell to 9% of buyers as users and REITs took over.
Cleveland Industrial Supply & Demand Dynamics
Source: CoStar Group, Inc.
Cleveland Demographics
Source: CoStar Group, Inc.
- Unemployment Rate: 4.3%
- Current Population: 2,070,683
- Households: 895,250
- Median Household Income: $74,028
Cleveland’s economy reflects both resilience and transformation. While the city experienced decades of population decline, recent stabilization and modest population growth signal renewed momentum, particularly as outer suburbs attract residents with affordable housing, strong schools, and expanding business activity. The region’s economy is anchored by globally recognized healthcare and higher education institutions, led by the Cleveland Clinic, University Hospitals, and MetroHealth, alongside advanced manufacturing and financial services employers like Progressive Insurance, KeyBank, and Sherwin-Williams.
Top Tenant Leases
- Midwest Group
- Saw Inc.
- HGR Industrial Surplus
- MWD Logistics
Population, Labor Force, & Income Growth
Source: CoStar Group, Inc.
Cleveland Industrial Construction
Industrial development in Cleveland remains restrained, with inventory growing just 1.6% since 2020, far below the national pace. Recent deliveries have slowed sharply, totaling roughly 380,000 square feet over the past year, and newer projects are leasing more gradually as demand has softened. Still, availability in large logistics buildings remains well below national levels, underscoring limited supply. Much of Cleveland’s new inventory has come from redeveloped or repurposed sites, reflecting a shortage of land. With only 0.3% of inventory under construction, modest development and site preparation initiatives should support stable long-term industrial conditions.
SF Construction Starts
Source: CoStar Group, Inc.
SF Under Construction
Source: CoStar Group, Inc.
Cleveland Industrial Sales
Industrial investment activity in Cleveland remains steady, with $58.1 million in sales at the end of Q4 2025. Deal flow is concentrated in smaller transactions as most sales closed below $10 million and institutional deals fell to 9% of buyers amid soft absorption and slowing rent growth. Users and REITs have helped support liquidity, together accounting for 40% of recent volume. Pricing varies by asset quality, with newer, well-leased facilities trading near $100 per square foot, while older properties continue to sell at meaningful discounts, attracting opportunistic buyers despite moderating fundamentals.
Cleveland Industrial Sales Volume
Source: CoStar Group, Inc.
By the Numbers
Q4 2025 | Source: CoStar Group, Inc.
- Sales Volume: $58.1M
- Price Per SF: $51
- Cap Rate: 10.5%
- Vacancy Rate: 4.4%
- Rent Growth: 2.4%
- Asking Rent Per SF: $6.68
- SF Under Construction: 1.1M
- SF Delivered: 125K
- SF Absorbed: -939K
