Although Cleveland still may be best known for the infamous Cuyahoga River fire of June 1969 and continues to be called “The Mistake on the Lake” in some circles, such cultural irritations are on the wane. “It's actually a very cool place,” says Bill Doty, principal of Doty & Miller Architects, “with culture, historic buildings, professional sports, and a huge metro park system and beautiful lakefront.”

In 2005, The Economist ranked Cleveland as one of the two most livable U.S. cities. (Pittsburgh was the other one.)
Corbis In 2005, The Economist ranked Cleveland as one of the two most livable U.S. cities. (Pittsburgh was the other one.)

Those amenities are a nice calling card for “The Metropolis of the Western Reserve” (another of the city's many nicknames), which is starting to show indications of recovery from an economic slump. “It's very exciting,” says David Browning, managing director of CB Richard Ellis' Cleveland office. “We went for 10 years without many new tenants in the market. Now we've had several in the past 12 to 18 months.” Joining such perennial jobs leaders as the Cleveland Clinic (24,000-plus employees), the Ford Motor Co. (about 9,300 employees), and Case Western Reserve University (more than 5,300 employees) are substantial newcomers including Quicken Loans and PR Newswire. “Cleveland is a hidden gem,” notes Amy E. Kellogg, a real estate attorney at Baker & Hostetler. “It's something the rest of the country hasn't discovered.”

Amenities

Cleveland Browns: football stadium (1999) designed by HOK Sport

Cleveland Cavaliers: basketball arena (1994) designed by Ellerbe Becket

Cleveland Indians: baseball stadium (1994) designed by HOK Sport

The Cleveland Museum of Art: original building (1916) designed by Hubbell & Benes; 1971 addition by Marcel Breuer; ongoing addition/renovation by Rafael Viñoly (expected completion: 2010)

The Cleveland Orchestra: Severance Hall (1931) designed by Walker and Weeks; 2000 renovation by David M. Schwarz/Architectural Services (architect of record: GSI Architects)

The Rock and Roll Hall of Fame and Museum: designed by I.M. Pei; opened in 1995

Office Market

Currently, there are 34.6 million square feet of multitenant office space in Cleveland. The average asking rate is $16.72 per square foot, and the Class A vacancy rate is 14 percent. “It's getting very tight in Class A,” says David Browning of CB Richard Ellis. “We're seeing $21 per square feet downtown right now, which is up a lot.”

Residential Market

Cleveland housing is very affordable, with a median existing-home price of around $140,000, where it has been for several years. This is expected to hold steady as the housing market cools.

Market Strengths

  • Health care industry
  • Housing affordability

Market Concerns

  • Poor job growth
  • Declining population growth

Growth

Job growth was negative for the 12-month period ending Sept. 30, 2006, compared with 1.5 percent growth nationally. The service, manufacturing, and transportation/utilities sectors showed marginal growth.

Developable Land

“Significant opportunities exist in terms of land, including brown fields,” Browning says. “I would say several hundred acres in the suburban markets are available. Land isn't our issue. Demand is our issue.”

Development Incentives

Cleveland's Neighborhood Development Investment Fund provides gap financing for large-scale development and housing projects; it also finances acquisition and site-preparation costs associated with industrial projects and office park developments. Borrowers can receive up to 25 percent of a project's total cost.

The city also offers a 60 percent real and personal property tax abatement for business retention and expansion projects outside the central business district to encourage revitalization of distressed areas citywide.

Key Architects

City Architecture
Major project: Arbor Park Village, the rehabilitation of a 36.3-acre inner-city public housing project into a privately owned, publicly financed development with 629 townhomes
From 1983 to 1989, principal Paul Volpe was the city's commissioner of architecture and helped design $150 million in municipal projects.

Herman Gibans Fodor
Major projects: Eliza Bryant Village, a 100- bed, skilled-nursing facility and 60-unit independent-living building; the 10,480- square-foot Citizens' Academy charter school
Herman Gibans Fodor has been in business for more than 60 years.

Westlake Reed Leskosky
Major projects: University Hospitals' 332,000- square-foot Wolstein Research Building and 100,000-square-foot Chagrin Highlands Medical Center
The firm was founded in 1905 by Abram Garfield, son of the 20th U.S. president.

Key Developers and Builders

First Interstate Properties
Major project: Steelyard Commons, a $120 million redevelopment of 125 acres of abandoned steel mill property into a 1-millionsquare-foot, open-air retail center
Founder Mitchell Schneider previously practiced real estate law before turning to development in 1989.

Forest City Enterprises
Major project: The Avenue at Tower City, a 367,000-square-foot retail center in one of the country's largest mixed-use developments
An $8 billion, NYSE-listed company with offices nationwide, Forest City was established in 1921.

Zaremba
Major project: the 58-acre, 200-home Mill Creek community, the largest new-home community built in Cleveland since the 1940s
Building homes since 1920, Zaremba has won a number of local and national design awards over the past decade.

Forecast

Besides an upturn in the national and regional economies, Cleveland's future depends largely on the local government's aggressive stance on development, rehabilitation, and revitalization. “A city's growth is tied to the vitality of its urban core,” says Joe Del Rey, Zaremba's new projects coordinator. “It takes all parties cooperating, both public and private. Developers work jointly with city development groups, governments, and business leaders to manifest the vision for any venture.”