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.
The relatively recent developments of Caesars Entertainment's and Rock Gaming's Jack's Casino Cleveland, Cleveland Medical Mart & Convention Center, and Flats East Bank have spurred subsequent development throughout Cleveland's CBD. Moreover, the Downtown Cleveland Alliance is focused on positioning the city for new office, retail, hotel, and entertainment developments, with over $6 billion in investments along Euclid Avenue alone since 2010. 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.
New supply is a major consideration in Downtown Cleveland. Approximately 1,200 rooms were added in 2016, including The Kimpton Schofield Hotel, Drury Plaza Inn, Hilton Convention Hotel, and Holiday Inn Cleveland Clinic. Furthermore, significant new supply is still on the horizon; 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 allows 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.
Limited sales volume occurred in Cleveland since January 2016, with only the Marriott Key Center and Ritz-Carlton trading during that period. The Marriott was part of a portfolio transaction, and the Ritz sold as part of the casino transaction.
