CLEVELAND RETAIL REPORT
First Quarter 2009
Business Property Specialists, Inc.
Broker
CLEVELAND
Retail Report | First Quarter 2009
TRENDS:
Vacancy Rate
Net Absorption
Construction
Asking Rents
OVERVIEW:
Overall Vacancy 7.1%
9.0%
8.5%
8.0%
7.5%
7.0%
6.5%
6.0%
The Cleveland retail market was moderately flat
during the first quarter. Vacancy was static, ending
the quarter at 7.1 percent, which is almost exactly
where it started the quarter. While many expected
a flood of closures, few actually materialized, as
evidenced by a very moderate net absorption
number of (24,227) square feet. However, sublease
space is significant, standing at just over 1 million
square feet at the end of the first quarter.
2Q08
3Q08
4Q08
1Q09
Average Asking Rental Rate $11.14
The largest lease signings for the quarter include the
Teams of Action moving into 30,500 square feet at
Greenbrier Plaza and Priced Less Foods leasing
28,000 square feet at Kronheims Plaza. Primary
losses for the quarter include Dollar Tree vacating
9,000 square feet at 34275 Center Ridge Road,
Dollar General moving out of 8,450 square feet at
Acme Plaza and Asuka Japanese Restaurant
vacating 7,000 square feet at 30010 Detroit Road.
$15.00
$14.00
$13.00
$12.00
$11.00
$10.00
3Q08
Despite the static nature of the overall vacancy rate,
the average asking rental rates have dramatically
decreased, ending the first quarter at $11.14 per
square foot. This is almost 6 percent lower than the
rate from a year ago. Additionally, it has become
commonplace for retailers to ask landlords for rent
relief, sometimes requesting a decrease of as much
as 40 percent.
4Q08
1Q09
Vacancy By Available Space Type
Sublet
10%
New construction remains scant, with just two
buildings totaling just under 25,000 square feet
being delivered during the quarter. Just over 800,000
square feet of retail space is currently under
construction, the largest of which is the Plaza at
Southpark, which totals 312,000 square feet.
Direct
90%
Major Lease Transactions
Tenant:
Building:
Size (SF):
Market:
Teams of Action
Greenbrier Plaza
30,500
Priced Less Foods
Kronheims Plaza
28,000
East
Dollar General
Shore Center Plaza South
11,200
Northeast
N/A
Merchant’s Square
8,600
Medina County
Advanced Auto Parts
7474 Mentor Avenue
6,400
Northeast
* All rents are per SF per YR unless otherwise noted.
NAI Daus | 3401 Enterprise Pkwy., #105 | Cleveland 44122 | 216.831.3310 | www.naidaus.com
CLEVELAND
Retail Report | First Quarter 2009
General Retail Market Statistics
Market
# BLDGS.
TOTAL GLA
(SF)
TOTAL AVAIL
(SF)
TOTAL VACANT
AVAIL (%)
YTD NET
Absorption (SF)
QUOTED RATES
($/SF/YR)
UNDER
CONSTRUCTION (SF)
Downtown Cleveland
284
6,440,950
158,811
2.5%
(4,855)
$8.74
33,426
East
389
5,291,750
219,873
4.2%
1,492
$12.69
0
Lorain County
918
7,923,552
296,833
3.7%
51,663
$7.37
35,629
Medina County
341
3,135,559
157,789
5.0%
1,501
$13.35
0
Northeast
676
8,911,202
786,552
8.8%
(13,391)
$8.94
47,600
South
362
3,911,263
457,499
11.7%
(2,428)
$6.68
68,412
Southeast
109
1,588,536
106,432
6.7%
(422)
$8.70
0
Southwest
772
9,413,774
514,554
5.5%
(93,399)
$10.44
22,089
2,311
18,876,637
863,010
4.6%
(41,871)
$8.68
22,406
493
6,259,742
198,917
3.2%
(8,762)
$14.87
0
# CTRS.
TOTAL GLA
(SF)
TOTAL AVAIL
(SF)
TOTAL VACANT
AVAIL (%)
YTD NET
Absorption (SF)
QUOTED RATES
($/SF/YR)
UNDER
CONSTRUCTION (SF)
Summit County
West
Mall Market Statistics
Market
Downtown Cleveland
2
384,294
50,000
13.0%
0
$15.00
146,170
East
4
3,228,378
398,317
12.3%
(800)
$0.00
0
Lorain County
1
940,174
52,101
5.5%
0
$0.00
0
Medina County
0
0
0
0.0%
0
$0.00
0
Northeast
4
3,436,671
373,031
10.9%
0
$10.11
0
South
2
2,532,340
67,923
2.7%
0
$24.00
0
Southeast
0
0
0
0.0%
0
$0.00
0
Southwest
2
2,617,761
39,121
1.5%
0
$14.59
0
Summit County
4
2,817,922
157,990
5.6%
(2,059)
$3.19
0
West
3
1,826,414
49,975
2.7%
0
$30.00
0
Power Center Market Statistics
Market
# CTRS.
TOTAL RBA
(SF)
TOTAL AVAIL
(SF)
TOTAL VACANT
AVAIL (%)
YTD NET
Absorption (SF)
QUOTED RATES
($/SF/YR)
UNDER
CONSTRUCTION (SF)
Downtown Cleveland
0
0
0
0.0%
0
$0.00
0
East
1
638,416
18,786
2.9%
(4,278)
$0.00
0
Lorain County
2
1,292,428
73,658
5.7%
0
$13.00
0
Medina County
3
1,068,769
40,415
3.8%
(1,280)
$11.32
0
Northeast
5
1,249,442
31,760
2.5%
(2,731)
$19.95
0
South
1
886,596
18,956
2.1%
0
$0.00
56,097
Southeast
1
317,380
25,045
7.9%
0
$0.00
0
Southwest
3
1,151,265
154,391
13.4%
1,580
$0.00
312,000
Summit County
9
3,885,543
146,415
3.8%
17,617
$14.46
0
West
2
878,293
119,558
832
$0.00
13.6%
0
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CLEVELAND
Retail Report | First Quarter 2009
Shopping Center Market Statistics
Market
# CTRS.
TOTAL GLA
(SF)
TOTAL AVAIL
(SF)
TOTAL VACANT
AVAIL (%)
YTD NET
Absorption (SF)
QUOTED RATES
($/SF/YR)
UNDER
CONSTRUCTION (SF)
Downtown Cleveland
1
66,973
0
0.0%
0
$0.00
0
East
54
3,052,647
268,132
8.8%
0
$15.63
0
Lorain County
62
5,055,147
694,977
13.7%
69,828
$11.63
70,000
Medina County
47
2,804,484
328,638
11.7%
4,100
$11.45
0
Northeast
163
8,433,886
1,000,313
11.9%
20,627
$12.82
0
South
51
2,776,425
216,971
7.8%
(18,814)
$10.61
0
Southeast
30
2,176,535
477,006
21.9%
400
$14.50
0
Southwest
137
7,807,383
683,789
8.8%
40,660
$14.07
0
Summit County
270
11,230,256
949,785
8.5%
(29,051)
$10.77
0
West
79
4,019,152
388,929
9.7%
18,114
$12.95
0
TOTAL AVAIL
(SF)
TOTAL VACANT
AVAIL (%)
YTD NET
Absorption (SF)
QUOTED RATES
($/SF/YR)
UNDER
CONSTRUCTION (SF)
Specialty Center Market Statistics
Market
# CTRS
TOTAL GLA
(SF)
Downtown Cleveland
0
0
0
0.0%
0
$0.00
0
East
0
0
0
0%
0
$0.00
0
Lorain County
1
187,483
11,400
6.1%
0
$10.00
0
Medina County
2
395,938
19,529
4.9%
(4,500)
$6.00
0
Northeast
0
0
0
0.0%
0
$0.00
0
South
0
0
0
0.0%
0
$0.00
0
Southeast
0
0
0
0.0%
0
$0.00
0
Southwest
1
525,555
0
0.0%
0
$0.00
0
Summit County
2
161,083
495
0.0%
0
$0.00
0
West
1
575,861
50,000
0
$0.00
8.7%
0
Total Retail Market Statistics
Market
# CTRS.
TOTAL GLA
(SF)
TOTAL AVAIL
(SF)
TOTAL VACANT
AVAIL (%)
YTD NET
Absorption (SF)
QUOTED RATES
($/SF/YR)
UNDER
CONSTRUCTION (SF)
Downtown Cleveland
288
6,892,217
208,811
3.0%
(4,855)
$12.26
179,596
East
470
12,211,191
905,108
7.4%
(3,586)
$14.06
0
Lorain County
1,038
15,398,784
1,128,969
7.3%
121,491
$10.10
105,629
Medina County
423
7,404,750
546,371
7.4%
(179)
$11.79
0
Northeast
920
22,031,201
2,191,626
9.9%
4,505
$10.74
47,600
South
464
10,106,624
761,349
7.5%
(45,242)
$8.66
124,509
Southeast
155
4,082,451
608,483
14.9%
(22)
$13.32
0
Southwest
991
21,515,738
1,391,855
6.5%
(51,159)
$13.02
334,089
2,779
36,971,441
2,117,200
5.7%
(55,364)
$9.40
22,406
631
13,559,462
807,379
10,184
$13.86
Summit County
West
6.0%
0
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CLEVELAND
Methodology | Definitions | Sub Market Map
Absorption (Net)
The change in occupied space in a given time period.
Available Square Footage
Net rentable area considered available for lease; excludes
sublease space.
4
Average Asking Rental Rate
Rental rate as quoted from each building’s owner/management
company. For office space, a full service rate was requested; for
retail, a triple net rate requested; for industrial, a NN basis.
3
8
Building Class
Class A product is office space of steel and concrete construction,
built after 1980, quality tenants, excellent amenities & premium
rates. Class B product is office space built after 1980, fair to good
finishes & wide range of tenants.
6
7
1
9
Direct Vacancy
Space currently available for lease directly with the landlord or
building owner.
Market Size
Includes all existing and under construction office buildings (office,
office condo, office loft, office medical, all classes and all sizes,
both multi-tenant and single-tenant, including owner-occupied
buildings) within each market.
5
2
10
Cleveland Submarkets
1.
Lorain County
Overall Vacancy
All unoccupied lease space, either direct or sublease.
Vacancy: 7.3% YTD Abs: 121K SF Avg. Rents: $10.10 PSF
SF/PSF
Square foot/per square foot, used as a unit of measurement
3.
Sublease
Arrangement in which a tenant leases rental property to another,
and the tenant becomes the landlord to the subtenant.
4.
Sublease Space
Total square footage being marketed for lease by the tenant.
Sublease space is not considered in the overall occupancy or
absorption numbers—only direct leases are included.
Sublease Vacancy
Space currently available in the market for sublease with an
existing tenant within a building acting as the landlord.
2.
West
Vacancy: 6.0% YTD Abs: 10K SF Avg Rent: $13.86 PSF
Downtown Cleveland
Vacancy: 3.0% YTD Abs: (5)K SF Avg. Rent: $12.26 PSF
Northeast
Vacancy: 9.9% YTD Abs: 5K SF Avg. Rent: $10.74 PSF
5.
East
Vacancy: 7.4% YTD Abs: (4)K SF Avg. Rent: $14.06 PSF
6.
South
Vacancy: 7.5% YTD Abs: (45)K SF Avg. Rent: $8.66 PSF
7.
Southeast
Vacancy: 14.9% YTD Abs: (22)K SF Avg. Rent $13.32 PSF
8.
Southwest
Vacancy: 6.5% YTD Abs: (51)K SF Avg. Rent: $13.02 PSF
9.
Medina County
Vacancy: 7.4% YTD Abs: (179)K SF Avg. Rents: $11.79 PSF
10.
Summit County
Vacancy: 5.7% YTD Abs: (55)K SF Avg. Rent: $9.40 PSF
This report is a research document of NAI Daus in Cleveland, Ohio. Questions related to
information herein should be directed to the Marketing Department at 216-831-3310 x200.
Information contained herein has been obtained from sources deemed reliable and no
representation is made as to the accuracy thereof. NAI Daus is an independently owned
and operated business and a member firm of NAI Global, an affiliation of independent
companies with over 325 offices and in 55 countries worldwide. Source-Costar.com
NAI Daus | 3401 Enterprise Pkwy., #105 | Cleveland 44122 | 216.831.3310 | www.naidaus.com