The current trends in the Cleveland and Akron industrial markets represent a good news/bad news situation. “The bad news is manufacturing activity continues to decline in the Cleveland/Akron area,” says Dan Harris, president of Cleveland-based Prudential BCG Commercial Real Estate Services. The closing of LTV Steel’s local facilities had a major impact on the area, because of the loss of jobs for residents and the loss of business for suppliers. Even though, some of the LTV facilities have been reopened after being purchased by International Steel Group, the area has still incurred a net loss.

“The good news is that there is increasing activity in establishing warehouse and distribution facilities in the area,” Harris says. For example, Sav-A-Lot Foods has opened a 300,000-square-foot distribution facility at Interstate 90 and State Road 45 in Ashtabula County.

There have been other positive developments in the area as well. Ford Motor Company recently established a third manufacturing operation at its Brook Park facility. Also, small steel product fabricators are moving to the area and creating a large presence in the aggregate, and progress is being made in expanding the polymer industry in the Cleveland/Akron area.

“The majority of industrial development is occurring in industrial parks that are municipally sponsored through tax and other economic incentives, including parks in Cleveland, Akron and in smaller cities, such as Alliance and Sebring,” Harris says. Public entities and private developers, often working in tandem, are recruiting manufacturing and high-tech tenants as their top choices. However, the Cleveland/Akron area also appeals to warehouse and distribution tenants because it has an exceptional transportation network and is centrally located to the major markets in the South and Midwest as wells on the East Coast.

Current vacancy rates continue to be substantially higher than historically reported. Rental rates generally range between $3 per square foot and $5 per square foot for a triple net lease.

The corridors of the major interstates — I-90, Interstate 80, Interstate 77 and Interstate 76 — should attract future development. These interstates connect New York with the Midwest markets, and they connect the northern manufacturing industries with markets like Kentucky and the Carolinas.

“The Akron-Canton area is likely to attract development because of the easy access to north-south and east-west interstates,” Harris says. “This area should grow with the expanding activity at the Akron-Canton Regional Airport.”

County and local development agencies throughout northeast Ohio are aiming to stimulate growth by sharing resources and coordinating their efforts through Team Neo. This regional economic development organization is dedicated to attracting the right company to the right area, Harris explains. The shared information and resources should also help shorten the site selection process for new and expanding businesses.

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