The Cleveland multifamily sector has proven to be resilient in the aftermath of the COVID-19 outbreak. In the face of unprecedented job losses, fiscal stimulus has been key to the sector’s stability, and landlords continue to report strong rent collections and leasing activity. Development activity remains high in the submarket, and units under construction represent over 70% of new supply market-wide. The long-term outlook for the sector is mixed. The pandemic has created pent-up demand for larger units that can accommodate home offices, with some households potentially turning away from pricier urban living. Cleveland’s multifamily market saw healthy demand in 2020, placing downward pressure on vacancies. While net absorption held up through most of the year, demand in the fourth quarter fell below the total from the same period of the previous year. Rent growth has remained steady in Cleveland, posting positive growth amid the pandemic. As mentioned above, rent trends by unit type suggest that renters are looking for more space. Rents for two- and three-bedroom units have seen the most growth since January and sit 2.5% above where they were at the start of 2020. Another popular floorplan for new development unit mixes is the one-bedroom with den, providing a quasi-home office to prospective residents. Ongoing revitalization and redevelopment in the Cleveland MSA have driven development activity over the last decade. Of last year’s deliveries, 88% are located in Downtown Cleveland. Research from the Downtown Cleveland Alliance estimates Downtown’s population is very close to its goal of 20,000 residents.
In this issue of our report, we touch on the following topics:
- Cleveland Population Trends and Economic Demographics
- New Multifamily Developments
- Multifamily Unit Absorption
- Occupancy and Rent Trends
- Cleveland MSA Submarket Breakdown
- Multifamily Operating Expense Averages