Cleveland’s real estate revs up for first time since March

There are definitive rays of hope that Greater Cleveland’s real
estate market is kicking back into high gear with the presidential
election over and the pandemic’s end is in sight (Xiaofan Luo).

It’s as if someone turned the electricity back on and got the gears of Greater Cleveland’s real estate sector turning again. Today, NEOtrans heard from a real estate professional about that surge and began asking around to see if other experts in the business locally were experiencing the same thing. Turns out they were.

The burst of activity has been sudden and significant in recent days, say people employed in various real estate functions be it leasing, buying/selling, land evaluation and construction. These activities are a leading indicator of potential economic growth.

By contrast, the residential real estate market remained active as people moved around in response to the pandemic, including Cleveland gaining new residents from more expensive, coastal markets.

On the commercial side, office tenants are making inquiries of available spaces in downtown buildings. Commercial property users are requesting information about properties available for development and redevelopment from downtown, through Midtown to University Circle. And site preparation for new construction or redevelopment of existing buildings has kicked into a higher gear. Could this be attributable to recent headlines?

“My answer before (we first spoke today), I would say no,” said David Hollister, a managing director in Newmark Group Inc.’s Cleveland office, in a Monday phone interview. “However, since we last spoke I have received two large downtown office inquiries.”

Hollister said the inquires were for spaces ranging from 15,000 to 30,000 square feet, made by firms whom he couldn’t name. Although they had shown casual interest before, they were more serious now.

“Since March, I had just two showings for space at one (downtown office) building,” he said. “Now I’ve had three in just the last 10 days.”

What caused those and other suitors to make their overtures? It’s probably too early to say for certain, but two pieces of major news broke in recent days. One was a resolution of the presidential election, removing a lot of uncertainty from the market. And the real estate market hates uncertainty.

The other piece of big news was the Monday morning announcement by pharmaceutical company Pfizer Inc. that its COVID-19 vaccine has shown a success rate of better than 90 percent in drug trials. Federal approval of the vaccine is expected, allowing it to be manufactured and first administered to health care workers by the end of December and the general public thereafter.

They are the first solid signs that the pandemic could be under control in the USA in early 2021 and the worst being over in the summer of 2021. With that knowledge, the real estate industry is gearing up in anticipation of that opportunity.

“I can’t derive at any conclusions (from the new office leasing interest) but the timing is certainly interesting,” Hollister said.

Conor Coakley, first vice president of CBRE, Inc.’s Cleveland office, was trying to spend his Monday camping at Dwell Box in Dundee, OH. But the reawakened real estate market kept intruding on his planned peace and quiet.

“It’s ironic that I’m camping with my family today and I’m trying to get off the grid for 24 hours but I keep on getting calls for (site) tour requests, etc.,” Coakley said. But after a pandemic-quieted spring and summer, he added “I’ll take it.”

It wasn’t just the leasing, buying and selling of real estate that saw an uptick. So did the interest in developing or redeveloping properties in Cleveland’s urban core, said the owner of a local environmental company who asked not to be named to protect his clients’ interest.

“For some reason today has been off the charts with a lot of due-diligence inquiries,” he said.”The calls have been about purchasing enviromental remediation and due diligence as well as inquiries about properties in Midtown, Downtown and Uptown.”

Given the timing, he said he suspected that the greater certainty from the wrapping up of the presidential election along with a more definitive end in sight for the pandemic were probably factors.

“I’m hearing from a lot of people trying to close deals,” he added. “This time of year is normally busy but it’s been extremely busy today.”

NEOtrans will keep watching to see if the sudden surge in Greater Cleveland’s real estate activity continues. If you’re aware of any longer term trends in the coming weeks, kindly let us know. We’d like to track it and share it.

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