MARKET SNAPSHOT

2025 Cleveland Forecast

2024

FORECASTED ANNUAL CHANGE

2025

$1,211

Q4 AVG. EFFECTIVE RENT

3.2%

FORECASTED ANNUAL CHANGE

$1,250

Q4 Avg. Effective Rent

92.5%

Q4 AVG. OCCUPANCY

+10 BPS

FORECASTED ANNUAL CHANGE

92.6%

Q4 Avg. Occupancy

1,778

2024 COMPLETIONS

1,592

10 Yr. Avg. Annual Completions

2,280

2025 COMPLETIONS

1,854

2024 NET ABSORPTION

1,257

10 Yr. Avg. Annual Net Absorption

2,350

2025 NET ABSORPTION

Source: CoStar
Key Market Themes for 2025
  • NEW APARTMENT UNIT COMPLETIONS EXPECTED TO TICK UP IN 2025

    Cleveland’s construction pipeline experienced an uptick in units under construction at the close of 2024 compared to the previous year. However, this increase remains well within the market’s capacity to absorb new supply.

  • CLEVELAND APARTMENT RENT GROWTH TO PERSIST

    Cleveland is expected to sustain its solid rent growth trajectory through 2025, with rents expected to rise by an additional 3.2% in the final quarter of 2025.

  • METROWIDE AVERAGE OCCUPANCY TO TICK UP

    While completions are expected to rise in 2025, net absorption is forecasted to modestly outpace new supply, resulting in a slight increase in the average occupancy rate to 92.6%.

2025 SUPPLY TRENDS

MULTIFAMILY STARTS INCREASED IN 2024

MULTIFAMILY STARTS INCREASED IN 2024

2023: 1,750 units > 2024: 2,061 units

Annual Increase of 311 units or 17.8%

10 Yr. Historical Annual Average: 1,719 units

UNITS UNDER CONSTRUCTION TRENDING ABOVE THE 10 YEAR AVERAGE

UNITS UNDER CONSTRUCTION TRENDING ABOVE THE 10 YEAR AVERAGE

3,113 units under construction as of December 31st 2024

10 Yr. Historical Annual Average Units UC: 2,439

21% Higher than historical average

UNIT COMPLETIONS PROJECTED TO INCREASE IN 2025

UNIT COMPLETIONS PROJECTED TO INCREASE IN 2025

2024: 1,778 units > 2025: 2,280 units

Annual Increase of 502 units or 28%

10 Yr. Avg. Annual Completions: 1,654 units

While development activity has slowed in many major markets, Cleveland’s construction pipeline experienced an uptick in units under construction at the close of 2024 compared to the previous year. However, this increase remains well within the market’s capacity to absorb new supply. Currently, units under construction represent 2.3% of existing inventory, which is significantly below the national average of 3.5%.

Upcoming unit deliveries in the Cleveland multifamily market will be concentrated in the Downtown Cleveland submarket, which is expected to account for 37% of new supply over the next 12 months. East Cleveland is the second most active submarket, with 803 units scheduled for delivery in 2025, representing 28% of marketwide completions. Additionally, East Cleveland has 1,068 units under construction, comprising more than one-third of the market’s total development activity.

In total, approximately 2,300 units are projected to come online in 2025, marking an increase of roughly 500 units from 2024. However, net absorption is expected to keep pace with this rise in supply, supporting improved occupancy conditions across the market throughout the year.

2025 RENT & OCCUPANCY TRENDS
ANNUAL RENT GROWTH & OCCUPANCY
OCCUPANCY TRENDS

Rental demand rebounded strongly in 2024, with nearly 1,900 units absorbed on a net basis, following a subdued performance in 2023. Cleveland’s occupancy rate stabilized at 92.5%, slightly below its 10-year historical average. Absorption was broad-based, however, with demand increasing across all quality segments of the multifamily market.

Looking ahead, new completions are expected to rise in 2025; however, net absorption is forecasted to modestly outpace supply, leading to a slight uptick in the average occupancy rate to 92.6%. Submarket-level performance is projected to closely mirror the broader market trend, with steady demand across asset classes. Cleveland’s relative affordability continues to provide renters with flexibility, allowing for movement between high-end, mid-tier, and lower-tier properties, further supporting balanced demand across the quality spectrum.

RENT TRENDS

Cleveland’s rent growth has consistently outpaced the national average over the past two years. In 2024, it was among a select few multifamily markets to achieve annual rent increases exceeding 3.0% in each quarter. This sustained upward trajectory is largely driven by Cleveland’s measured development pipeline, which has effectively balanced supply and demand, supporting steady rent appreciation.

Looking ahead, Cleveland is expected to maintain its solid rent growth trajectory through 2025, with rents projected to rise by 3.2% year-over-year by the fourth quarter. The West Cleveland and Brooklyn Heights submarket is anticipated to lead the metro, with rent gains approaching 5.0%. Furthermore, all ten Cleveland submarkets are forecasted to achieve annual rent increases exceeding 2.5%, underscoring the market’s strength and resilience of Cleveland’s multifamily market during this current cycle.

Submarket Rent & Occupancy

2024 INCOME & EXPENSE ANALYSIS

12-month period ending November 2024

CLICK TO VIEW FORECAST DATA

INCOME

INCOME
Income AssumptionsValue / UnitYear Change (%)
Occupancy (%)93.00%-0.5%
Rental Income / Occupied Unit$1,130.336.5%
Recoverable Expenses / Occupied Unit$46.567.9%
Other Income / Occupied Unit$73.310.3%
Total Income / Occupied Unit$1,250.196.1%
Operating Income
Rental Income$1,051.245.9%
Recoverable Expenses$43.307.3%
Other Income$68.19-0.2%
Total Income$1,162.735.6%

EXPENSES

EXPENSES
Operating ExpensesValue / UnitYear Change (%)
Payroll$126.824.8%
Marketing & Advertising$13.1310.6%
Repairs & Maintenance$110.73-0.7%
Administrative$44.631.3%
Management Fees$49.113.4%
Utilities$101.714.8%
Real Estate & Other Taxes$122.94-0.6%
Insurance$36.5920.3%
Other Operating Expensees$2.02
Total Operating Expense$607.672.9%
Net Operating Income$555.058.6%
Please note that the income and expense data presented in this section is sourced from trusted third-party data providers and does not reflect the entire market. While we strive for accuracy, our firm does not provide any warranty or guarantee regarding the reliability or precision of this information. We recommend users exercise discretion and professional judgment when interpreting and utilizing this data.
MARKET OUTLOOK

Cleveland’s multifamily market is poised for steady performance in 2025, supported by a balanced supply-demand dynamic and the metro’s resilient economic foundations. Occupancy rates are projected to rise slightly to 92.6% by year-end, as net absorption modestly outpaces new completions. Rent growth is expected to remain solid at approximately 3.0%, further reinforcing market stability.

The metro’s manageable construction pipeline, affordable rents, and diverse economy—anchored by the finance, healthcare, and manufacturing sectors—position Cleveland for continued stability and strong performance compared to national trends. Healthcare remains a cornerstone of the local economy, with major networks such as Cleveland Clinic, University Hospitals, and MetroHealth serving as key employers. Cleveland’s reputation as a healthcare hub is further supported by the Health-Tech Corridor (HTC), a 1,600-acre innovation district that links Downtown Cleveland to University Circle. The HTC is home to hospitals, academic institutions, business incubators, and over 170 health-tech companies, underscoring the metro’s leadership in health and technology.

Disclaimer: This multifamily forecast incorporates data from reputable third-party sources, including Costar, Yardi Matrix, the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, and ESRI. While we make every effort to ensure accuracy, we cannot guarantee the reliability of the projections provided. Forecasts are inherently subject to change due to evolving market conditions, economic factors, and unforeseen events. We strongly encourage users to conduct independent due diligence and consult with an MMG Advisor before making any investment decisions based on this information.

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