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Sales Volume Climbing in Cleveland’s East Submarket

CoStar Market Insights: Investors Acquiring Older Assets
September 10, 2018
Aerial of the 276-unit One University Circle which delivered earlier this year at 10730 Euclid Ave. in Cleveland, Ohio.



Sales volume in the East submarket has far surpassed volume levels for 2017. Already this year, volume has topped $80 million, noteworthy for most Cleveland submarkets, where multifamily investment activity is typically subdued.

See CoStar COMP #4454326.

Given that vacancies have been climbing over the past year, the uptick in volume is surprising. Much of this stems from the sale of 444 Richmond Park East, a 3-Star, 736-unit project which sold in June for $41.3 million. This asset offers few of the modern luxury amenities that the submarket’s newer communities have, which could actually be advantageous for it.

The East submarket has seen multiple high-end projects come online, but the Cleveland economy is not explosive. Limited income growth is a real factor for renters here, and newer projects in this submarket typically charge close to 10 percent more per month than the older supply.

Vacancies in the submarket’s 4-Star inventory are now well above the historical average, and owners are offering more concessions in these projects than anywhere else in the area. Vacancy figures for 3-Star communities like 444 Richmond Park East remain strong.

This appears to have increased investor interest in the area’s older assets, as the higher rents and more vibrant social scene are likely pressuring many long-term residents to find more affordable communities.

Demand for rental space in the area has strengthened, partly because of its proximity to Cleveland’s Central Business District. Downtown communities continue to perform well, as developers make innovative use of historical tax credits, and help boost the appeal of downtown living.

But University Circle is the employment hub of the East submarket, and the main draw for locals is looking to work near where they live. University Circle is helping to bring in new residents, and the East is one of the few submarkets not seeing a decline in population, which encouraged the construction of multiple new projects.


CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

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