HEARTLAND SNAPSHOT, OCTOBER 2007

Cleveland Retail Market

Retail development in Cleveland is focused mainly on redeveloping well-located, under-utilized or obsolete real estate, including brownfield sites, residential properties or older shopping centers. Many developers are also adding a mixed-use component, often residential or office, to their retail projects. This is often happening at the insistence of city planners or to increase density on small, expensive sites. Universities and hospitals are joining in by adding retail components to their campuses.

The Flats East Bank project by the Wolstein family and Fairmount Properties and the Warehouse District project by Stark Enterprises in downtown Cleveland are two of the biggest projects in the city right now. Combined, the developments could add up 500,000 square feet of retail to downtown, in addition to more than 1 million square feet of office and possibly 1,000 residential for-sale and rental units. This should continue to increase the demand for additional downtown residential growth; these developments could come online as early as 2010.

On the west side of Cleveland, the Avon and Westlake area is becoming a super-regional trade area, forcing retailers to choose between North Olmsted or Westlake/Avon. Recent development in the corridor includes Crocker Park in Westlake, which has continued to grow in size since opening late in 2004. Three new shopping centers are also under development in Avon, which will add 500,000 square feet to the market. Retailers are responding to the residential growth in the area, including the new, upscale homes being constructed in Westlake and Avon. There is also a new interchange being proposed in Avon on Interstate 90 at Lear-Nagle Road, which, if it goes forward, will likely spur even more commercial and residential growth.

On the southeast side of Cleveland, Macedonia is also growing into a super-regional trade area. There are four major new developments proposed along the State Route 8 corridor, which is now undergoing a major overhaul. These developments could add 2 million square feet of retail to the market when complete. This corridor is getting a lot of attention because of its incredible highway access and location between Akron and Cleveland.

The overall vacancy rate for Cleveland right now is 8 percent, which is relatively steady from this time last year.

The Macedonia/State Route 8 corridor is the place to keep an eye on. There is land available and zoning is not impossible. The population has a good average income and the area is desirable for residential growth. It also has freeway access and close proximity to employment corridors. For the same reasons, you should keep an eye on Avon and North Ridgeville for growth in the future.

— Christopher Seelig is vice president, director of retail services, for Cleveland-based NAI Daus.

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