Cleveland’s retail market in Q3 2025 maintained stable fundamentals despite softening demand in larger spaces. Leasing activity remained healthy overall, supported by service-based tenants and fitness or discount retailers backfilling vacancies left by bankrupt national chains. Net absorption reached about 420,000 square feet over the past 12 months, while availability stayed near a record low at 5.2%. Asking rents rose modestly, up 1.3% year-over-year to an average of $16.25 per square foot, below the metro’s 10-year average but still outpacing the troughs seen earlier in the decade. Rent growth varied by submarket, with stronger gains in Chagrin Corridor and Lyndhurst/Landerhaven. Limited new supply and steady small-tenant leasing continue to underpin market stability despite headwinds from slower population growth and higher operating costs.

 

Key Findings

• Cleveland’s retail market maintained stability in Q3 2025, with 421,000 SF absorbed and vacancy at 4.5%, reflecting resilient tenant demand despite limited new deliveries.
• Market rents climbed 1.3% year-over-year to $16.25 per SF, supported by low availability and steady leasing from service-based and fitness tenants across key submarkets.
• Investment activity totaled $104 million with an average price of $117 per SF, while a modest 177,000 SF under construction underscores disciplined development and balanced market fundamentals.

 

Cleveland Retail Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

Cleveland Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 4.3%
• Current Population: 2,072,105
• Households: 895,142
• Median Household Income: $73,590

 

Cleveland’s economy in Q3 2025 reflects a well-balanced mix of legacy industries and emerging growth sectors. Once dominated by steel and automotive manufacturing, the metro has diversified significantly, with healthcare now serving as its economic backbone, anchored by major employers like Cleveland Clinic, University Hospitals, and Metro Health. The city’s Health-Tech Corridor has strengthened Cleveland’s biomedical and technology presence, drawing significant investment and innovation. Financial services continue to expand, supported by the presence of a Federal Reserve Bank. Despite long-term population decline, modest growth in 2024 and rising numbers in Lorain and Medina Counties signal renewed regional momentum, helped by Cleveland’s notably affordable cost of living.

 

Population, Labor, & Income Growth

Source: CoStar Group, Inc.

 

 Cleveland Retail Construction

Construction activity in Cleveland’s retail market remained limited in Q3 2025, consistent with long-term trends of modest development. Only 177,000 square feet were underway, representing just 0.1% of total inventory, one of the lowest levels among major U.S. metros. Elevated financing costs and cautious investor sentiment have kept speculative projects to a minimum, while most ongoing developments are fully or largely preleased. Deliveries totaled 152,000 square feet over the past 12 months, falling below the decade average. With less than 5% of space under construction still available, new supply poses minimal risk to existing properties, helping sustain Cleveland’s historically tight retail fundamentals.

 

SF Construction Starts

Source: CoStar Group, Inc.

 

SF Under Construction

Source: CoStar Group, Inc.

 

 Cleveland Retail Sales

Retail investment activity gained strong momentum through Q3 2025, reaching $104 million in quarterly sales and reflecting the market’s stability. Private buyers remained active, while REITs increased their presence, accounting for over 40% of transactions, well above historical averages. Major trades included Phillips Edison & Company’s $51.5 million purchase of Westgate Mall, one of Ohio’s top-performing shopping centers, and retail components of the Pinecrest lifestyle center totaling $78 million. Grocery-anchored and service-oriented centers, such as Parkway Shoppes and Kruse Commons, continued to attract attention. With limited new supply and consistent demand, Cleveland’s retail investment market remains well-positioned heading into 2026.

 

Cleveland Retail Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Source: CoStar Group, Inc.

• Sales Volume: $104M
• Price Per SF: $117
• Cap Rate: 8.6%
• Vacancy Rate: 4.5%
• Rent Growth: 1.3%
• Asking Rent Per SF: $16.25
• Under Construction: 177K SF
• Delivered: 152K SF
• Absorbed: 421K SF