Northeast Ohio Multifamily Market Report
Cleveland, Ohio
Market Overview
Cleveland’s unemployment levels sit at 5.7% as of Q1 2024, largely due to its reliance on vulnerable industries like manufacturing. However, the healthcare sector remains strong, led by major employers like the Cleveland Clinic and University Hospital. These employers have continued to invest in new facilities and job creation initiatives. Furthermore, the decision of Fortune 500 company Sherwin-Williams to keep its global headquarters in Cleveland and invest substantially in the region signals confidence in the market’s economic future, with plans for new facilities and job creation. The Cleveland multifamily market reflects national trends with a slowdown in demand and increased deliveries. Multifamily rents are growing year-over-year (YOY) in the Cleveland multifamily market. Despite record-level deliveries, the construction pipeline is moderating, which may lead to a tightening vacancy rate in H2 2024 as net absorption improves amid easing inflation and moderate rent growth.
Market Performance
Cleveland’s rent growth remains strong, with multifamily rents increasing by 3.2% in the last 12 months. Cleveland outperforms the national average due to limited deliveries, ranking among the top five markets in the country for multifamily rent growth as of Q2 2024. Multifamily vacancy in Cleveland currently stands at 8.4%. While areas with recent deliveries of Class A and B units like Downtown Cleveland experience positive net absorption, Cleveland’s most affordable submarkets, such as Brooklyn Heights and Lakewood, face negative net absorption. Construction activity has been gradually slowing over the past year, with around 3,200 units currently underway. However, developers remain active in downtown areas, with projects like The Bell and others contributing to the evolving landscape of the housing market.
In Q4 2023, Cleveland experienced a decline in sales volume, with $13 million traded and annual sales volume totaling close to $90 million. While institutional buyers were rare over the past five years, individual buyers, particularly those seeking value-add opportunities, are now driving the market. Despite the subdued sales volume outlook, above average rent growth may continue to attract investors seeking value-add opportunities for the remainder of 2024.
Cleveland, OH By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 8.4%
- Rent Growth: 3.2%
- Units Delivered: 2,219
- Units Absorbed: 15
- Sales Volume: $84.1M
Akron, Ohio
Market Overview
Before the COVID-19 pandemic, Akron faced challenges in employment and demographics, particularly due to its heavy reliance on manufacturing. Job growth resumed in May 2020, and Akron’s total employment remains 3% below pre-pandemic levels. Efforts are being made to diversify the economy, with a focus on expanding the polymer industry and revitalizing downtown through initiatives like Elevate Akron and the Bounce Innovation Hub. Additionally, Akron’s healthcare sector remains a significant driver of economic growth, with investments in facilities like Akron Children’s Hospital and Summa’s new tower. In 2024, Akron’s multifamily market mirrors national trends, with vacancy rates continuing to rise due to record-level deliveries and weak demand.
Market Performance
Negative net absorption for the fifth consecutive quarter has led to an increase in vacancy, reaching 7.1% as of Q2 2024. Construction starts have slowed due to elevated interest rates and high costs, resulting in only 95 units under construction. Akron’s multifamily market maintains a 3.6% rent growth YOY average, well above the national benchmark of 0.8%, allowing landlords to sustain steady rent increases, especially in pricier suburbs like Hudson and Aurora. Transaction volume saw a decline in H2 2023, totaling less than $10 million. The top sale of the year occurred in May, with The Towers in downtown Akron trading for $15.5 million to Green Harvest Capital, signaling a focus on value-add opportunities.
Akron, OH By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 7.1%
- Rent Growth: 3.6%
- Units Delivered: 700
- Units Absorbed: 300
- Sales Volume: $37.5M
Canton, Ohio
Market Overview
Job growth recovery in Canton has varied across industries since its GDP contraction in 2020. Manufacturing, a dominant sector in Canton, faced challenges but has shown consistent gains. Notable employers like Timken Company navigated the pandemic relatively well, while other industries such as healthcare and food production remained strong. Canton is widely recognized as the birthplace of the Pro Football Hall of Fame. Established in 1963, this institution draws approximately 200,000 visitors each year. In line with many tourist destinations, the Hall of Fame faced challenges in 2020, experiencing a 33% decline in attendance. However, visitor numbers have rebounded notably, especially during the 2021 enshrinement ceremony. An extensive expansion project, the $900 million Hall of Fame Village, is currently underway. The initial $250 million Phase I focused on revamping Tom Benson Hall of Fame Stadium and adding youth sports fields. Phase II aims to introduce a luxury hotel, an indoor waterpark, office facilities, a convention center, and a retail area.
Market Performance
The Canton multifamily market currently has a vacancy rate of 5.2%, up by 0.5% compared to the previous year, with 61 units experiencing negative absorption and no net deliveries in the past year. Rents have increased by 3.8% in the last 12 months, averaging around $900 per month. Approximately 53 units are under construction in the market. Among different building types, Class A and B buildings have a vacancy rate of 5.5%, with 32 units absorbed over the past year, while Class C buildings show a vacancy rate of 7.5% and 92 units of negative absorption. Year-over-year rent growth was highest in Class A & B buildings at 9.2%, followed by 5.0% in Class C buildings and 2.0% in Class D buildings.
Over the past three years, there have been 84 sales totaling $77.4 million in volume and involving 2,100 units of inventory. In the last 12 months, there have been more than 20 sales totaling $11.7 million in volume.
Canton, OH By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 5.2%
- Rent Growth: 3.8%
- Units Delivered: 0
- Units Absorbed: -61
- Sales Volume: $11.7M
