Sources: JLL Research, Bureau of Labor Statistics

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

-700

-700

-600

-400

-300

0

800

4,800

4,900

5,900

-2,000 0 2,000 4,000 6,000

Educational & Health Services

Government

Trade, Transportation & Utilities

Other Services

Information

Financial Activities

Manufacturing

Professional & Business Services

Leisure & Hospitality

Mining, Logging & Construction

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 . January 2015

5.4% Cleveland unemployment

1.3% Cleveland 12-month job growth

5.6% U.S. unemployment

2.2% 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 13,700 jobs or 1.3 percent. Meanwhile,

unemployment decreased 1.8 percentage points year-over-year to

5.4 percent.

• Jobs growth among industrial employment sectors in Cleveland has been

trending up in recent months, recording an annualized net gain of 5,700

jobs across the metro. Employment gains were led by the mining, logging

and construction sector, which added 5,900 jobs year-over-year.

• Total U.S. nonfarm employment increased by 252,000 jobs in December

and upward revisions were made to prior months totaling 50,000 jobs. Over

2.9 million jobs were added over 2014, making it America's best year of job

growth since 1999.

• Meanwhile, U.S. unemployment decreased 20 basis points to 5.6 percent,

its lowest rate in six years. Leading economists are now forecasting

unemployment to shrink to 5.2 percent, approximately “full employment,” by

the end of 2015.

Industrial employment update

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, if

any, 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 built-to-suit projects, as developers are still

weary of speculative construction

Industrial real estate implications

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

November 2012 November 2013 November 2014

Total Non-farm

Employment

1,034,400

1.8%

1,035,700

0.1%

1,049,400

1.3%

Unemployment Rate 6.9% 7.2% 5.4%

Cleveland Supersectors November 2012 November 2013 November 2014

Mining, Logging & Construction 35,200 -1.4% 35,900 2.0% 41,800 16.4%

Manufacturing 124,300 1.3% 124,700 0.3% 125,500 0.6%

Trade, Transportation, & Utilities 185,400 1.9% 186,400 0.5% 185,800 -0.3%

Information 15,300 -1.3% 15,100 -1.3% 14,800 -2.0%

Financial Activities 63,000 1.0% 62,400 -1.0% 62,400 0.0%

Professional & Business Services 147,000 2.8% 147,000 0.0% 151,800 3.3%

Educational & Health Services 197,700 3.2% 198,800 0.6% 198,100 -0.4%

Leisure & Hospitality 91,700 5.2% 90,700 -1.1% 95,600 5.4%

Other Services 39,700 -1.5% 40,500 2.0% 40,100 -1.0%

Government 135,100 -0.4% 134,200 -0.7% 133,500 -0.5%

Employment statistics Cleveland

Industry employment stratification Cleveland

Educational & Health Services,

198,100, 19%

Trade, Transportation & Utilities,

185,800, 18%

Professional & Business Services,

151,800, 14%

Government, 133,500, 13%

Manufacturing, 125,500 , 12%

Leisure & Hospitality, 95,600, 9%

Financial Activities, 62,400 , 6%

Mining, Logging & Construction, 41,800, 4%

Other Services, 40,100, 4%

Information, 14,800, 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

© 2014 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

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

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.

Ford Motor Company Ι Automobile Manufacturing: Capital Investment

The Ford Motor Company (NYSE: F) remains on schedule to start manufacturing the 2.0-liter EcoBoost engine in Brook Park by early January. The resurging

automaker is in the midst of more than $200 million in renovations to its Cleveland Engine Plant No. 1 and adding at least 450 workers. EcoBoost engines use

directly injected fuel and turbo-charged air for extra power. They're replacing bigger, less efficient engines in Edges, Fusions.

Heinen's Grocery Stores Ι Grocery Stores & Supermarkets: Expanding

Demolition crews are clearing the future home of Heinen's $9 million expanded bakery, meat-cutting facility and prepared foods kitchens in Warrensville Heights, just

west of the grocer's current warehouses. Scheduled for completion in early 2016, the 70,000-square-foot food production facility will be more efficient than Heinen's

current buildings, enable the company to offer products it doesn't have the space for now, and provide full-time jobs for another 20 to 25 people.

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.

Plymouth Industrial REIT Ι Commercial Real Estate: Capital Markets

Boston-based Plymouth Industrial REIT recently purchased the 255,000-square-foot warehouse at 1755 Enterprise Parkway for $15 million ($59 per square foot).

The building was sold by TFPR Enterprise LLC, a unit of Dallas-based Thackeray Partners. Thackeray bought the building in 2006 for $12.3 million. The building

was fully leased at the time of sale. Tenants include Royal Chemical Company and Technoform Glass Insulation.

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.