Construction Pipeline Nearly Doubles In Q3 2026
Cleveland’s industrial vacancy rate rose from 3.8% to 4.0% in the third quarter as net absorption turned negative, posting −176,070 square feet (sf) after 427,062 sf in Q2. Direct absorption stayed positive at 255,110 sf; the decline came from 431,180 sf of sublease space returning to the market. Average asking rents kept climbing, up $0.08 per square foot (psf) from $5.68 to $5.76 psf, with warehouse space at $5.68 psf and flex at $7.01 psf.
Leasing picked up in both deal count and volume: 149 leases totaling 3.1 million square feet (msf), compared with 108 leases and 2.4 msf in Q2, a 28% increase in volume. Five deals exceeded 100,000 sf, including 392,449 sf to Hearn Industrial Services at 5520 Chevrolet Boulevard, 198,400 sf to Luminary Logistics Solutions at 1400 Lowell Street, and 161,984 sf to Dealer Tire at 12930 Darice Parkway. The Southwest submarket led lease volume with 963,282 sf, while the Southeast led lease count with 33 deals.
Sales volume rose even as deal count fell, with 92 transactions totaling 4.8 msf compared with 105 transactions and 4.3 msf in Q2. Fourteen sales exceeded 100,000 sf. Notable sales included a two-property portfolio of 4211 Shuffel Street NW and 30301 Carter Street transferred from Plymouth Industrial REIT to Realty Income Corporation for a combined $42.85 Million. Stark County led sale volume with 1,357,399 sf across 11 deals, while the Akron submarket led sale count with 18 sales.
Five buildings totaling 175,000 sf were delivered in Q3, all were build-to-suit, including 50,000 sf for National Boiler Works at 1564 West 130th Street in Brunswick, built by Freeman Building Systems, and 45,000 sf for Mayfran International at 6650 Beta Drive in Mayfield Village, built by GEIS Companies. The under-construction pipeline nearly doubled to 1.8 msf across 18 projects, up from 957,547 sf in Q2, with 381,622 sf expected to deliver by the end of 2026. Nine projects totaling 1.1 msf broke ground this quarter, led by a 650,000-square-foot build-to-suit at 7895 Northfield Road in Walton Hills, a unified operations center for the Cleveland Clinic and a 158,170-sf speculative building at 9500 Hamilton Drive in Mentor by Premier Development. Speculative construction grew to four projects and 238,370 sf, up from 22,000 sf in Q2.
