Leasing Industrial Property in Northeast Ohio

This study examines the leasing of industrial property in the Cleveland and Akron regions of Northeast Ohio for the time period 2000-2005. Ohio is a traditional manufacturing state that must cope with obsolete buildings, reduced manufacturing employment, reduced population, environmental contamination, and existing zoning for industrial property. It is similar to many other parts of the industrial world that have been affected by changes in the location of manufacturing jobs and reflects local responses to the new economic reality. The relative limited academic research on the industrial property market indicates that the market is segmented by use that includes manufacturing, warehouse, and flex buildings. Demand for this type of property is affected by access to transportation, proximity to end users or the source of goods for production, and population size. Additional drivers that have been found significant are infrastructure, government incentives, natural cost advantages, and size of buildings. Rental rates appear to be influenced by building characteristics, specific amenities of the area, and local supply and demand. An analysis of the two regions allows an overview of the changes in industrial property use, vacancies, and average rental rates. Results of this study indicate that vacancy rates are higher in Akron (11.18%) than Cleveland (10.71%), but rents are not statistically different for the general category of industrial property. When the data is divided into warehouse and flex space, there is a statistical difference in vacancy rates and rents by region and size of building.