Download - STEP UP DOWNTOWN | Draft Market Assessment
2014 Market Assessment
DRAFT FINDINGS – APRIL 2014
Process for the Market Assessment Assessment to identify
opportunities through next investment cycle (5 to 7 years) and inform “Step Up” plan
Primary and secondary data sources
Stakeholder interviews – real estate, investment & economic development
Market Assessment Document Top Global Trends in Effect in
Cleveland Market Opportunities in this
Investment Cycle Key Market Indicators in
Cleveland
Global Trends in Effect in Cleveland
Top Global Trends in Effect Need for skilled talent is driving
businesses to compact urban centers ◦ Millennials today 36% of US workforce, 50% by 2020
Millennials & empty nest Boomers want to live downtown ◦ 40% increase in Downtown Cleveland residents
Changing workforce demographics also include women ◦ Focus on safety, mixed-use & cultural diversity
Top Global Trends in Effect Demand for Mobility Options ◦ Downtown Walk Score 87; Transit: 82; Bike 52.
Health & Wellness Opportunity for Cleveland
◦ Both Industries and Lifestyle Preferences
Social Equity a Growing National Concern
◦ Downtown as a common gathering place, inviting and welcoming to all
Current Market Opportunities
Residential: Strong & Sustained Residential is driving the current investment cycle 800+ units added w/o increasing vacancy rate 2,000 more units online by 2015 growing
downtown population to 15,000 Remaining tax credit eligible properties could
supply another 2,000 to 2,500 units – will be absorbed this cycle? Demand for resident-serving amenities
Office & Retail: Niche Opportunities OFFICE
Overall 18% vacancy / $17 rates “Super A” niche: ◦ Modern formats / smaller footprints ◦ Regional retention ◦ 8-9% vacancy & ~$30 leasing rates ◦ May support additional new build Entrepreneurial niche ◦ Street level retail conversions ◦ Co-working space
RETAIL Oversupply - contracting nationally Consolidate in key activity centers & pedestrian connectors
Niche opportunities ◦ General Merchandise $16.5 leakage ◦ Resident & worker-serving personal services ◦ Visitor-serving near convention center ◦ Health & fitness related
Visitor: Building Out $465M investments in Convention Center &
Global Center for Health Innovation Playhouse Square expansion &
enhancements 1,800 new hotel rooms in progress/planned Revenue and occupancy numbers will be
closely watched Casino Phase II timing still TBD
Key Indicators for Downtown
Reasons for Key Indicator Recommendations
Tell the story succinctly and powerfully Promote & Extend Residential Demand Recruit & Retain Skilled Talent Attract & Retain Businesses Uncover & Promote Niche Opportunities Report Data Specific to Downtown
Residential & Worker Indicators 12,000 Downtown Residents 124,000 Downtown Workers Resident Demographics
◦ 51% hold a Bachelor’s or Advanced Degree ◦ 74% White Collar ◦ 70& single, never married ◦ Average per capita income 64% higher than
metro average Residential occupancy ◦ 95% for last 11 quarters
Cleveland Diversity Index: 62.1 Cleveland Cost of Living Index: 101.0
Median Annual Wage for MSA $35,610 ◦ ~$0.5 M MSA workers’ salaries support
$1,000/mo Transit Ridership Increases 2013: ◦ Light Rail: 4.6% ◦ Heavy Rail 5.7%
Commercial Indicators
◦ 18% overall office vacancy ◦Asking Lease Rates Q2 2013
$19.10 ◦ 37,600 net absorption 2013 ◦Regional retention of businesses ◦ “Super A” ~8-9%vacancy; $30.00
s.f. asking rate ◦Aggregate Disposable Income:
$37.7 M
Visitor Indicators
◦Convention Center Bookings projected 300,000
◦Number Hotel Beds: 3,557 ◦Hotel Occupancy: 67.2% ◦Revenue per Available Room:
$79.33 ◦Downtown Visitor Attraction: 8.5 M
to top 5 venues
New: Civic Realm Indicators Safety: Comparative Crime Rates; Availability of Ambassadors
Mobility: Ridership; Walk score: 87; Transit: 82; Bike: 57
Connectivity: Bike Lanes/Racks; Transit Ridership; Wifi Hotspots
Diversity& Culture: 356 Ethnic Restaurants; 36 Cultural Gardens; 1000+ Performances; Pop-Ups & Tactical Urbanism
2014 Market Assessment
DRAFT FINDINGS – APRIL 2014