One of the key indicators of the health and vibrancy of any business district is real estate.
While there was a noticeable decrease in foot and vehicle traffic during the pandemic, downtown residential development remained on track. Now, as businesses start to return, commercial real estate occupancy rates are starting to return to pre-pandemic levels.
“We met our goal of reaching 20,000 residents in the first quarter of this year,” says Michael Deemer, president and CEO of Downtown Cleveland Alliance (DCA). “And with the new development that is taking place, we are marching steadily toward our next goal of 30,000 residents by 2030.
“We added over 1,000 apartments downtown over the course of last year, and there are a number of projects soon to be underway like the renovation of 55 Public Square, the City Club Apartments and the Centennial at 9th and Euclid.”
Even more encouraging for downtown businesses is the recent groundbreaking of CrossCountry Mortgage’s new headquarters, which will eventually bring more than 600 new jobs to downtown.
“We’re also expecting Sherwin-Williams to begin construction on its new headquarters by the end of the year,” Deemer adds.
It’s part of a mass migration of new businesses to downtown, which also includes iHeartMedia moving its operations into the city. With more than 1,700 employees, RightSource will also locate its headquarters downtown.
Karen Paganini, president and COO of K&D Development and chairwoman of DCA, is understandably bullish on Downtown Cleveland.
“It’s extremely important to us because about a third of our portfolio is downtown,” she says.
While residential occupancy remained strong during the pandemic, commercial occupancy rates slipped into the 40% range, says Paganini.
“But it’s come roaring back,” she says. “We passed 60% quite a while ago, and we are about 80% back to work.”
While companies are still making a determination on whether or not to let some people work at home, with all of the new companies retargeting downtown, it would appear that commercial space will soon be at a premium.
Another company adding new jobs to downtown is Rocket Mortgage.
“There is a tremendous talent pool in Cleveland, and we have made a years-long commitment to expanding our operations in the city for this exact reason,” says Mike Malloy, chief amazement officer for Rocket Mortgage. “The Midwest has expanded into being a major American tech hub.”
The company made recent partnerships with the city of Cleveland and state of Ohio, agreeing to add more than 700 new jobs in Downtown Cleveland over the next five years.
“We are proud to have a large footprint in the city,” adds Malloy. “Our commitment to Cleveland is stronger than ever, and we are excited to continue connecting residents to well-paying jobs that will help their family and the entire community.”
The transition started on July 21, with team members returning to the Higbee Building, says Malloy.
“This is not only important for internal collaboration, it also helps us support the downtown businesses that will welcome the additional traffic.”