Sources: JLL Research, Bureau of Labor Statistics

Job growth/loss by sector (12-month change) Cleveland

-1,400

-900

-500

-400

600

700

800

3,100

4,700

5,700

-3,000 -1,000 1,000 3,000 5,000 7,000

Trade, Transportation & Utilities

Financial Activities

Information

Government

Other Services

Educational & Health Services

Manufacturing

Mining, Logging & Construction

Professional & Business Services

Leisure & Hospitality

Number of Jobs

Total jobs vs. unemployment rate Cleveland

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

850,000

900,000

950,000

1,000,000

1,050,000

1,100,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Peak: 1,083,529 jobs

3.3%

unemployment rate

total jobs

Metro Cleveland . February 2015

6.0% Cleveland unemployment

1.2% Cleveland 12-month job growth

5.7% U.S. unemployment

2.3% U.S. 12-month job growth

• According to the most recent estimates from the BLS, total non-farm

employment in Cleveland stood at ~1.0 million payrolls, representing

an annualized increase of 12,400 jobs or 1.2 percent. Meanwhile,

unemployment decreased 100 basis points year-over-year to 6.0

percent.

• Industrial employment sectors have experienced modest employment

expansion over the last year, recording an annualized net gain of

3,100 jobs across the metro. Employment gains were led by the

mining, logging and construction sector, which added 3,100 jobs year-

over-year.

• Total U.S. nonfarm employment increased by 257,000 jobs in January,

and upward revisions were made to prior months totaling 147,000

jobs. Gains in January were led by retailers, construction firms and

health-care companies.

• Meanwhile, the U.S. unemployment rate decreased 90 basis points

from the prior year to 5.7 percent, the fifth month in a row below 6.0

percent. Labor force participation ticked up slightly to 62.9 percent but

remains at its lowest level since 1978.

Industrial employment update

Industrial employment trends (12-month change) Cleveland

-30.0

-20.0

-10.0

0.0

10.0

20.0

2010

2011

2012

2013

2014

Mining, Logging & Construction Trade,Transportation & Utilities Manufacturing Other Services

Due in part to the effects of manufacturers’ rebuilding inventories, along with

an upward trend in consumer spending, Cleveland’s industrial leasing market

has seen improvement. The region has recorded positive absorption of

industrial space for three consecutive years. The demand picture for the next

few years is also improved, thanks to a growing local economy which recently

surpassed pre-recession manufacturing exports levels.

Demand growth is expected to be modest, though, as manufacturing

companies bounce back from the recession leaner and more efficient,

requiring less space and employees to produce the same output. While

demand growth will stop rents from falling further, only minimal rent growth is

expected over the next few years. Vacancy currently sits around 7.0 percent,

which will induce some construction over the next 24 months. Look for these

developments to be mainly built-to-suit projects with limited speculative

construction taking place.

Industrial real estate implications

December 2012 December 2013 December 2014

Total Non-farm

Employment

1,031,500

1.7%

1,031,300

0.0%

1,043,700

1.2%

Unemployment Rate 7.0% 7.0% 6.0%

Cleveland Supersectors December 2012 December 2013 December 2014

Mining, Logging & Construction 33,900 -1.5% 33,900 0.0% 37,000 9.1%

Manufacturing 124,600 1.4% 124,500 -0.1% 125,300 0.6%

Trade, Transportation, & Utilities 187,100 1.4% 187,600 0.3% 186,200 -0.7%

Information 15,200 -1.9% 15,200 0.0% 14,700 -3.3%

Financial Activities 63,000 1.3% 62,500 -0.8% 61,600 -1.4%

Professional & Business Services 144,300 1.7% 145,800 1.0% 150,500 3.2%

Educational & Health Services 196,800 2.8% 198,200 0.7% 198,900 0.4%

Leisure & Hospitality 92,600 7.3% 89,800 -3.0% 95,500 6.3%

Other Services 39,800 -0.7% 40,000 0.5% 40,600 1.5%

Government 134,200 -0.9% 133,800 -0.3% 133,400 -0.3%

News on the street Cleveland businesses expanding, contracting, etc.

Employment statistics Cleveland

Industry employment stratification Cleveland

Educational & Health Services, 198,900, 19%

Trade, Transportation & Utilities,

186,200, 18%

Professional & Business Services,

150,500, 14%

Government, 133,400, 13%

Manufacturing, 125,300 , 12%

Leisure & Hospitality, 95,500, 9%

Financial Activities, 61,600 , 6%

Other Services, 40,600, 4%

Mining, Logging & Construction, 37,000, 4% Information,

14,700, 1%

Andrew Batson Senior Research Analyst Great Lakes Region tel +1 216 937 4374 Andrew.Batson@am.jll.com 127 Public Square, Suite 2410 Cleveland, OH 44114 www.jll.com/cleveland

Robert Kramp Senior Vice President – Americas Midwest & Great Lakes Research Director tel +1 312 228 2470 Robert.Kramp@am.jll.com 200 East Randolph Street, 47th Floor Chicago, IL 60601 www.us.joneslanglasalle.com/research

© 2015 Jones Lang LaSalle IP, Inc. All rights reserved.

All information contained herein is from sources deemed

reliable; however, no representation or warranty is made

to the accuracy thereof.

JLL Americas Research • Cleveland Industrial Employment Update 2

Brennan Holdings Ι Commercial Real Estate: Development

Brennan Holdings and Ray Fogg Corporate Properties are teaming up to develop a business park in Stow starting with a 108,000-square-foot warehouse building

expected to be under construction later this year. The building will face Seasons Road and feature ceilings 32 feet high, fire sprinkler systems and multiple truck

docks. Fogg said plans call for installing a road that will open all 45 acres up to development at the same time as the new warehouse goes up.

Cardinal Fasteners Ι Fabricated Metal Product Manufacturing: Ceasing Operations

Once the darling of the U.S. wind energy industry and a success story that made it a presidential photo op, Bedford Heights-based Cardinal Fasteners is now set to

close. Parent company Dokka Fasteners recently announced that it will close Cardinal by the end of the first quarter and move its equipment to Dokka’s operations

in Auburn Hills, Michigan. Dokka Fasteners, part of the German-based Wurth Group, purchased Cardinal in 2011 following a Chapter 11 bankruptcy filing.

Industrial Realty Group Ι Commercial Real Estate: Development

Demolition recently began on the shuttered Randall Park Mall. The Industrial Realty Group, which purchased the property in 2013, is razing the mall to make way for

an industrial park which could bring 1.2 million square feet of new construction to the 100-acre site near Interstates 480 and 271. Randall Park is the first mall in

Industrial Realty’s sprawling portfolio, which includes former corporate headquarters, manufacturing facilities and smaller industrial properties in Ohio and Michigan.

Post-Up Stand Ι Graphic Design Services: Expanding

Maple Heights trade show display and signage company Post-Up Stand is expanding and adding equipment that will grow its printing capabilities. Recently Post-Up

Stand bought a 20,000-square-foot building at 17701 Pennsylvania Avenue in Maple Heights for $350,000 to house inventory and some production. The company is

currently storing inventory in the building and in April plans to expand its production into the facility.

Sysco Corporation Ι Food Wholesalers: Mergers & Acquisitions

Houston-based Sysco Corporation (NYSE: SYY) recently announced that it has agreed to sell 11 US Foods Inc. distribution centers, including one in Twinsburg, to

rival Performance Food Group in an effort to convince federal regulators to approve its $3.5 billion merger with US Foods. Sysco in December 2013 agreed to buy

US Foods however, the Federal Trade Commission still is reviewing the transaction.

United States Steel Corporation Ι Commercial Real Estate: Development

United States Steel Corporation (NYSE:X) is laying off 614 workers as it idles its Lorain mill for an undetermined period beginning the first week of March. The

company said the temporary idling is a result of the softening in the energy market. With plummeting oil prices, drillers worldwide have been lowering their

exploration forecasts for 2015. That has meant a slowdown in the demand for the tubular steel made at the Lorain mill.