TerryCoyne.com - Cleveland Commercial Real Estate


CoyneReport - 2011 Year-End Wrap Up
While looking back at the 2011 commercial real estate market, we first need to look at prior years to spot trends which may have occurred. Utilizing CoyneReport.com, we have reviewed the past several years in terms of trends and sales and report the following:

The total value of sales over $1,000,000 has increased every year since 2008. Large sales in 2011 topped $700,000,000, for an increase of over $200,000,000 when compared to 2010. The years 2010 and 2009 also recorded an increased value of sales year-over-year. Although past events are not a perfect predictor of the future, it is safe to say that the economic recovery has started in Cleveland’s commercial real estate market. The numbers were boosted by a handful of large transactions, including Rock Ohio Caesars’ purchases of land and the Ritz, Duke Realty’s sale of its North Olmsted office building, and the purchase of the former Chrysler Stamping Plant in Twinsburg. Although these large sales can skew the numbers, their presence does signal that some investors are willing to risk a great deal of capital in Northeast Ohio.



A closer look at the types of properties sold in 2011 reveals some interesting details. Retail properties performed surprisingly well, with over $136 million in sales in 57 transactions > $1,000,000. The only types of buildings that saw more value in transactions were office and industrial properties. A total of 30 office properties sold for just over $137 million, for an average over $4,500,000 per transaction. 52 industrial properties sold for a total of $148,220,661, averaging over $2,800,000 per sale. Owner-users were the primary purchasers of industrial space in 2011, but the strengthening market would suggest that more investment sales could take place in the near future. The amount of money in land sales, more than $120 million, would also suggest that development could increase in 2012.




Many industries are still feeling the effects of the recession, and businesses have been reluctant to hire. The amount of money spent on real estate suggests that some industries, such as manufacturing, are recovering and others, such as apartments, continue to experience success.
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CoyneReport Reveals Trends/Changes in Value Across Cuyahoga County Communities
Since the Cuyahoga County Assessor’s Office has last updated property values, almost 1,000 commercial sales have taken place. Utilizing the search power of the CoyneReport.com, we have compiled a list of all these transactions. Since the Assessor and the Board of Revision use sales comps to determine property values, we thought we’d take a look to see whether local communities can expect their commercial property values to increase or decrease in the 2012 reassessment. Commercial property values provide a significant portion of many cities’ property tax revenues, so this data is relevant to school boards, town halls, and concerned citizens alike. Our study revealed some surprising results.

The City of Cleveland has had the largest positive difference in property values, with buyers paying more than $26 million over the assessed values. Other cities that saw large increases were Berea ($9,734,301), Richmond Heights ($7,891,800) and Bedford ($4,740,971). Woodmere, Parma, Beachwood, Lakewood and North Royalton also saw significant gains.



Not every city saw gains, however. Where 21 cities recorded gains, 27 saw property values slip. The good news is that the county as a whole recorded $11,040,693 in gains. Shaker Heights (-$5,766,980), Solon (-$5,691,720) and Strongsville (-$5,559,400) recorded the biggest losses. Westlake, Brooklyn and Euclid all recorded negative differences between assessed values and sales prices as well. 


The news of cities showing lower property values is not surprising; the last full reassessment was conducted in 2006, with an update in 2009. The Great Recession took its toll on commercial property in Cleveland in 2009 and 2010, so it is hardly surprising that property values in some communities would be lower. The news that the county’s commercial property values have increased, albeit slightly, is welcome good news. The City of Cleveland led the way as companies and investors purchased property, and the trend of downtown revitalization continues. Although not a perfect predictor of future events, this analysis would seem to suggest that the commercial real estate market is beginning to recover from the lows of the recession.

For this and other insights into the Cleveland commercial real estate market, please visit us at CoyneReport.com.
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CoyneReport - Analysis of Ohio's CMBS Loans & Breakdown of 8 Counties
State of Ohio:

There are 1,088 hold CMBS loans in the stateof Ohio. The total appraised value for these properties is approximately $8.5billion, with the total current loan balance of a little more than $10 billion...
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