Cleveland Commercial Office Space for Rent

Q4 2025

Cleveland Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Cleveland commercial real estate (CRE) market in late 2025 is characterized by a "recalibration" across all sectors, with steady fundamentals despite some headwinds [6]. The Office market is seeing active pre-leasing and a shift toward the Central Business District (CBD), though vacancy remains elevated as the market rightsizes [1]. Industrial vacancy has risen from historic lows due to new deliveries and a pause in large-tenant expansion, but small-bay demand remains solid [6, 7]. Retail is a standout performer with low vacancy and steady rent growth [8]. Multifamily is absorbing a supply uptick, with rent growth expected to persist through the end of the year [10].

TenantBase Proprietary Data [12] highlights the distribution of active tenant demand over the last 90 days (254 total deals):

  • Retail/Storefront dominated market activity with 59.45% of all searches [12].
  • Warehouse was the second most active sector at 33.86% [12].
  • Office accounted for 7.48% of total search volume [12].

Office Market

Market Overview Cleveland's office market is navigating a period of adjustment, with leasing activity improving but still trailing historical averages. A clear preference for amenity-rich CBD assets is driving movement in the market [1].

  • Vacancy & Availability: The overall vacancy rate stood at 23.3% in Q3 2025, a slight increase of 10 basis points from the previous quarter [1, 2]. However, Class A vacancy in prime corridors is tighter, reflecting the flight to quality [4].
  • Net Absorption: The market recorded negative net absorption of approximately (37,519) SF to (47,048) SF in Q3, driven largely by Class B vacancies [1, 4].
  • Rental Rates: Average asking rents rose to $21.42 per SF, supported by higher-priced listings in the CBD [1, 2].
  • Market Drivers: Third-quarter leasing volume totaled 732,189 SF, a solid improvement over the first half of the year [1]. Demand is shifting from the suburbs back toward the CBD, where tenants are pre-leasing space in well-managed buildings [1].

TenantBase Activity [12]

  • Demand Share: Office accounted for 7.48% of total search volume [12].
  • Lease Term Preference: Demand is heavily concentrated in short-term flexibility [12]:
    • Less than one year: 64.71% of deals [12].
    • 3-5 Years: 17.65% of deals [12].
    • 2-3 Years: 11.76% of deals [12].
  • Size Requirements: Tenants seeking short-term leases are looking for small footprints. The average lower SF required for a Less than one year term is 500 SF [12].

Industrial & Warehouse Market

Market Overview The Cleveland industrial market is "recalibrating" to a balanced position after years of record-low vacancy. While vacancy has ticked up, the market remains fundamentally sound with disciplined construction activity [6].

  • Vacancy & Rent: Vacancy rates range from 3.7% to 5.5% depending on the report, rising due to new supply entering the market [5, 6]. Average asking rents dipped slightly to $5.48 - $5.95 per SF (NNN) [5, 7].
  • Demand & Supply: Net absorption was negative in Q3 2025, with figures ranging from (386,311) SF to (517,583) SF, as several larger tenants vacated space [5, 7].
  • Construction: The pipeline has slowed considerably to roughly 777,722 SF under construction, which is expected to help stabilize vacancy rates heading into 2026 [6].
  • Leasing Activity: Deal volume was driven by smaller users, with over 60 transactions under 10,000 SF recorded in the quarter [6].

TenantBase Activity [12]

  • Demand Share: Warehouse accounted for 33.86% of total search volume [12].
  • Lease Term Preference: Demand is strongest for short-to-mid-term leases [12]:
    • 1-2 Years: 38.24% of deals [12].
    • 3-5 Years: 32.35% of deals [12].
    • 2-3 Years: 17.65% of deals [12].
  • Size Requirements: The average lower SF required for a 3-5 Years term is 2,786 SF, while the 5+ Years term average requirement jumps to 20,000 SF [12].

Retail Market

Market Overview Cleveland's retail market remains stable and resilient, with availability near record lows and steady leasing from service-based tenants [8].

  • Vacancy & Availability: The vacancy rate is a low 4.5%, with availability at 5.2%, underscoring the scarcity of quality space [8].
  • Net Absorption: The market absorbed approximately 421,000 SF over the last 12 months, driven by fitness centers, discount retailers, and service providers [8].
  • Rental Rates: Asking rents climbed 1.3% year-over-year to $16.25 per SF [8].
  • Construction: Development activity remains limited with only 177,000 SF under construction, minimizing supply risk [8].

TenantBase Activity [12]

  • Demand Share: Retail/Storefront activity dominated with 59.45% of all search volume [12].
  • Lease Term Preference: Retail tenants show a decisive preference for long-term stability [12]:
    • 5+ Years: 37.50% of deals [12].
    • 1-2 Years: 19.64% of deals [12].
    • 3-5 Years: 19.64% of deals [12].
  • Top Locations: Tenant interest is highest in Cleveland (City) (15 deals), followed by Akron (6 deals) and Middleburg Heights (5 deals) [12].

Multifamily Market

Market Overview The multifamily sector continues to perform well, with occupancy expected to tick up and rent growth persisting despite a temporary increase in deliveries [3, 10].

  • Vacancy & Occupancy: Occupancy dipped slightly to 91.3% - 92.0% in early-to-mid 2025 but is forecast to rise to 92.6% by year-end as absorption outpaces new supply [3, 10].
  • Rents: Average rents reached $1,225 per unit, reflecting a 1.6% to 3.2% annual increase [3, 10].
  • Construction: Completions are expected to rise to 2,300 units in 2025, but this supply is concentrated in the Downtown and East Cleveland submarkets and remains manageable [10].
  • Demand: Net absorption is forecasted to be 2,350 units for the full year of 2025, indicating strong underlying demand for rental housing [10].

2026 Outlook

Looking ahead to 2026, the Cleveland market is positioned for stability and gradual growth.

  • Industrial Balance: The reduced construction pipeline will help the industrial sector rebalance, with vacancy rates expected to stabilize as demand for modern space continues [6].
  • Multifamily Strength: With construction starts trending above the 10-year average but absorption remaining strong, the sector is poised for continued rent growth and high occupancy [10].
  • Investment Opportunity: Investors are expected to find value in neighborhood retail centers and well-located industrial assets, supported by Cleveland's higher yields compared to coastal markets [8, 11].

Sources

  1. Newmark: Cleveland Office Market Overview Q3 2025
  2. Terry Coyne: Market Reports
  3. MMG Real Estate Advisors: Cleveland Q3 2025 Market Report
  4. CBRE: Cleveland Office Figures Q3 2025
  5. Newmark: Cleveland Industrial Market Overview Q3 2025
  6. Cushman & Wakefield: Cleveland Industrial MarketBeat Q3 2025
  7. CBRE: Cleveland Industrial Figures Q3 2025
  8. Matthews: Cleveland Retail Market Report Q3 2025
  9. Cushman & Wakefield: Cleveland MarketBeats
  10. MMG Real Estate Advisors: 2025 Cleveland Forecast
  11. Markets Group: 2026 U.S. Commercial Real Estate Outlook
  12. TenantBase Proprietary Market Data (Cleveland - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.