People are moving back into downtown Cleveland. And that’s good news for the city.
Geoff Coyle, managing partner with Cleveland-based Ostendorf-Morris, said that the influx of new residents moving into downtown has inspired developers to plan new apartment buildings in the heart of the city. Many are converting downtown office buildings — which had been mostly empty — into apartments.
“That really helps get rid of the vacant space,” Coyle said. “It tightens that office market up and it’s bringing young people, 30-somethings, not only into Northeast Ohio but to the Cleveland CBD. They want to live, work and play here. That’s bringing energy and excitement to the CBD.”
And this is a trend that is getting stronger. The Finch Group, a Florida developer, is beginning construction now on a 177-unit apartment building at Chester Avenue and East 97th Street in the city’s Hough neighborhood just north of the Cleveland Clinic. The new project is named the Preserve.
Last year, developer K&D build The Residences at Hanna, 102 luxury apartments at Playhouse Square in downtown Cleveland.
There’s plenty of other activity in downtown Cleveland, too. A downtown Horsehoe Casino is now open – it let in its first gamblers in 2012 — and brings a steady stream of visitors to the city’s CBD. The 23-story Ernst & Young building, the first new office tower in Cleveland in more than 20 years, is now open for business in the CBD. And the Global Center for Health Innovation and Convention Center opened last summer here.
Then there’s the Flats East Bank project, one that is coming online in the city in phases. When complete, the multi-use project will bring new Class-A office space, hotels and multi-family units to an important piece of downtown Cleveland located along the Cuyahoga River. The project has inclded a new Alot Cleveland downtown hotel.
The resurgence of the CBD has been a boon to not only downtown Cleveland, but to the entire Cleveland market, Coyle said.
“When you have a center of a big metropolitan area with a vibrant energy, that impacts the whole regional area,” Coyle said. “There is more going on in Northeast Ohio than you might have thought. The activity in downtown helps the other markets. Just look at the industrial markets. They are all in the outlying areas, and they are all doing well right now.”
The multi-family sector is the strongest in the Cleveland area today. But, as Coyle says, the region’s industrial market is thriving, too.
The demand for good, modern industrial space is high, Coyle said. The supply is getting low, with developers not yet building spec industrial product.
This good news doesn’t mean that downtown Cleveland, and the rest of the region’s commercial real estate market, doesn’t still face challenges.
As Coyle said, the office market is still sluggish and office vacancies still too high. The retail market hasn’t recovered as quickly as industrial or multi-family, either.
The office market in particular faces challenges, largely because the way people work is changing. This isn’t unique to downtown Cleveland, but many companies are letting a greater number of their employees work from home, at least part of the time. Other companies are moving toward open office spaces with more collaborative and shared spaces and less space devoted to traditional offices and cubicles.
All of this means that many companies need a smaller amount of office space.
But Coyle says that the future looks bright for Cleveland and Northeast Ohio in general. The state of Ohio has recently taken steps to become a friendlier place for businesses, and the positive impact of this has spilled over into the region as a whole, he said.