Cleveland’s core continues to drive the city’s multifamily market, with most development and investor activity taking place within or close to downtown. With demographic contraction tempering and demand improving, rent growth is once again accelerating, at 2.2 percent year-over-year through October 2018.
After a lethargic 2017 and first half of 2018, job growth finally picked up during the past two quarters. Trade, transportation and utilities led growth by adding 9,200 positions year-over-year through September. The state’s Department of Transportation is supporting a $306 million investment in the city’s infrastructure—an upcoming boulevard between Interstate 490 and East 105th Street near the Cleveland Clinic. The hospitality sector is also performing well, with medical tourism expanding, backed by the metro’s reputable health-care system.
The metro had roughly 2,800 units under construction as of October. All multifamily projects completed in the first 10 months of the year cater to Lifestyle renters, a fact that is putting further pressure on working-class households. As long as job gains in Cleveland continue to sustain demand at current levels, the upcoming stock should be easily absorbed, despite an overall aging population and slow household formation.