Q2 2025 Cleveland Retail Market Report
Highlights
- Performance is strong in the sector, as rental space availability is nearing an all-time low, at just 5.2%, and service-oriented and experimental tenants are absorbing backfilled spaces.
- Rent growth remains healthy and location-driven, with submarkets such as the Chagrin Corridor and Lyndhurst posting rent gains of nearly 2%, and the Rockside Corridor saw a 1.5% increase.
- Private buyers and REITs primarily drive larger sales transactions, while smaller deals are attracting interest towards service-anchored and grocery-anchored centers.
By the Numbers
- Sales Volume: $102M
- Cap Rate: 8.6%
- Market Sale Price Per SF: $114
- Vacancy Rate: 4.7%
- Rent Growth: 4.0%
- Market Asking Rent Per SF: $16.35
- SF Under Construction: 192K
- SF Absorbed: 432K
- SF Delivered: 123K | Q2 2025 | Source: CoStar Group
Demographics
- Unemployment: 3.8%
- Current Population: 2,074,423
- Households: 901,548
- Median Household Income: $71,602
Market Performance
Minimal construction, robust leasing activity, and increasing investor demand are key drivers of Cleveland’s success within the retail market. Tenant absorption is undergoing quick turnarounds, especially in busy suburban corridors. Leasing volumes have skyrocketed within the first half of the year as fitness centers, entertainment venues, and discount retailers reoccupy second-generation space, particularly in spaces under 10,000 SF. Submarkets such as Medina County, the Northeast corridor, and select areas in the Southwest are top producers in Q2 based on their affordability, accessibility, and tenant mix.
With just 192,000 SF currently under construction, much of the space already pre-leased, this is driving a landlord-driven market, allowing firmer rent holds and price pushes, particularly in well-positioned retail corridors with strong daytime demand. Overall, Cleveland’s market performance is defined not by rapid expansion, but by a disciplined equilibrium—characterized by low vacancy, selective tenant growth, and stable investment that reflects confidence in the region’s long-term retail resilience.
Market Asking Rent Per SF and Vacancy Rate
Source: CoStar Group
Under Construction
A few larger retail projects are moving forward despite the region’s limited construction pipeline. The most significant is a 56,000-square-foot Acme store in Medina County, which is fully pre-leased and is expected to deliver by mid-2027. In Lorain County, a 47,582-square-foot building at 4415 Leavitt Road is currently underway, with a target completion date of late 2025. Brecksville’s Valor Acres is adding two more retail pads, 35,280 and 10,980 square feet, both integrated into a broader mixed-use setting. These projects, while limited in number, reflect targeted investment in suburban growth areas with firm pre-lease commitments.
Sales
The Cleveland retail investment market is showing steady growth, with Q2 2025 property sales totaling approximately $75.4 million, marking a 5.3% increase over Q2 2024. Investor appetite remains strong, particularly among private buyers, who continue to dominate the landscape, drawn by low availability rates, limited new construction, and the relative stability of the region’s retail fundamentals. Single-tenant assets and grocery-anchored shopping centers remain top targets, accounting for 70% of total sales activity.
Major deals included:
- The $51.5 million sale of Westgate Mall in Fairview Park to Phillips Edison & Company, a Cincinnati-based public REIT, marked the most significant retail transaction of the year; the property is anchored by Target, Lowe’s, Kohl’s, and Petco and ranks among the most visited shopping centers in Ohio.
- Kruse Commons in Solon was acquired for $7.2 million at a 6.8% cap rate, with the property approximately 80% occupied at the time of sale.
Sales Volume and Market Sale Price Per SF
Source: CoStar Group
12-Month Market Leaders: Top 10 Performing Submarkets
