Located on the shores of Lake Erie, where the Cuyahoga River spills into the Great Lakes, Cleveland boasts favorable geographic features that served as an impetus for its incorporation and rapid economic growth at its inception. Like many other Rust Belt cities, Cleveland suffered a mass exodus of jobs to locations overseas following the national decline in manufacturing in the 1970s. Other major industries have since stepped in to fill the void, including the financial and advanced energy industries and the insurance, healthcare, life sciences, and technology sectors. The healthcare sector is a cornerstone for the market, including the presence of Cleveland Clinic and University Hospitals; this sector's influence was the driving factor in the development of the Convention Center and Global Center for Health Innovation (known as the Medical Mart), which is the only facility of its kind in the United States. The city is also home to two major universities, Cleveland State University and Case Western Reserve University. Furthermore, City tax and other business incentives, coupled with easy access to major transportation portals by air, train, water, and road, enhance the area's appeal as a commercial and manufacturing center.

 

The relatively recent developments of Caesars Entertainment's and Rock Gaming's Horseshoe Casino Cleveland, Cleveland Medical Mart & Convention Center, and Flats East Bank have spurred subsequent development throughout Cleveland's CBD. The $250-million renovation and repositioning of the Ameritrust Complex into The Metropolitan at The 9, including an Autograph Collection by Marriott, a Heinen's Grocery Store, an apartment complex, and leased office space, was completed in 2015. In August 2015, the $45-million Cleveland State University Center for Innovation in Health Professions development opened. Notable projects underway include the $2-billion reconstruction of the Innerbelt Parkway and consolidation of freeway ramps; the $276-million, 377,000-square-foot cancer center at The Cleveland Clinic (to be completed by 2017); the construction of a new campus for MetroHealth (to begin in 2016); and numerous others. Within the financial industry, major changes include two large-scale bank mergers. In October 2015, Key Bank announced a plan to acquire Buffalo, New York-based First Niagara Financial Group in a transaction valued at $4.1 billion. The combined bank would have approximately $135 billion in assets, making it the 13th largest commercial bank in the United States. Moreover, in January 2016, Huntington Bancshares announced it would acquire Akron-based FirstMerit Bank in a deal valued at $3.4 billion. The combined company will have approximately $95.5 billion in assets, making it the largest bank in Ohio.

 

Limited sales volume occurred in Cleveland in 2014 and 2015, with four hotel sales recorded at a sales price averaging just under $91,000 per room. New supply is a major consideration in Downtown Cleveland, fueled by the upcoming 2016 Republican Convention, in addition to the strong corporate and leisure demand within the area. Approximately 600 rooms have been added so far in 2016, including The Kimpton Schofield Hotel, the Drury Plaza Inn, and the Holiday Inn Cleveland Clinic. Furthermore, significant new supply is still on the horizon. Most notably, the 600-room Hilton had a soft opening on June 1, 2016. The hotel, which is connected to the convention center, will be fully operational by the time of the Republican Convention in the summer of 2016. Furthermore, an estimated 1,800 additional rooms in the CBD are likely to open by 2018. While this number is somewhat staggering, the unaccommodated demand levels are very high, and much of this supply will be absorbed upon opening. The new convention hotel will allow Cleveland to compete for more events and will allow the Global Center for Health Innovation to achieve its full potential. Occupancy will fall with the entrance of these new hotels, but demand across the commercial, convention, and tourism sectors should support the market growth in the long term. Value gains should accordingly remain positive for the next several years, but will likely taper in 2017, similar to the anticipated national trend.