Thursday, September 18, 2025
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Midwest Market Reports

IowaMarket ReportsMidwestMidwest Market Reports

Cedar Rapids Continues Unprecedented Growth

by Kristin Harlow

By Scott Olson, Skogman Commercial Each year when I update exciting growth in Iowa’s second largest city, it is hard to imagine the pace can continue despite what we hear nationally about high interest rates, tariffs and inflation. Plus, this great city adapts after natural disasters to quickly recover and create a better place to work and call home. Our latest national rankings reflect this effort, skill and dedication: • No. 1 city for affordable housing in America (WalletHub, 2025) • No. 3 best place to live in the Midwest (Spacewise, 2025) • No. 12 best city for economic opportunity (U.S. News & World Report, 2025) • No. 4 city with most affordable rent (WalletHub, 2025) • No. 17 best city to buy a house in America (Niche.com, 2025) • A top 100 best city for jobs in America (WalletHub, 2025) • A top 100 best place to retire in America (Niche.com, 2025) • No. 7 safest city in America (WalletHub, 2025) • No. 33 best run city in America (WalletHub 2024, top 40 ranking since 2017) In fall 2024, the City of Cedar Rapids was selected to participate in the Bloomberg Harvard Innovation Track as a continuation of the …

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IowaMarket ReportsMidwestMidwest Market Reports

Investment from Tech Companies, Developers Shows Potential of Quad Cities

by Kristin Harlow

By Chris Beason, NAI Ruhl Commercial Co. As we move through 2025, the commercial real estate market in the Quad Cities region continues to adjust to tighter capital markets, rising costs and evolving consumer and business preferences. The bi-state region of the Quad Cities includes Moline, East Moline and Rock Island, Illinois; and Davenport and Bettendorf, Iowa, as the main core cities. The Quad Cities is the largest metro area between St. Louis and Minneapolis on the Mississippi River. When you look at the fundamentals like industrial absorption, land sales and retail demand, the Quad Cities continues to outperform expectations. The level of investment we’re seeing from both global tech companies and regional developers shows long-term confidence in the strength and potential of our market. Pivotal year for industrial The Quad Cities market mirrored the national trends with increased development of industrial buildings and rising rental rates. While the new industrial development we have seen locally over the past three years is to be celebrated, there is still a shortage of smaller 10,000- to 50,000-square-foot buildings. This is especially true for companies that desire to purchase real estate. There is significantly more inventory for lease of smaller product available than …

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IndustrialMarket ReportsMidwestMidwest Market ReportsOhio

Why Industrial Users Are Taking a Closer Look at Cleveland

by Kristin Harlow

By David Stecker, JLL As advanced manufacturing reshapes industrial real estate across the Midwest, Cleveland is emerging as a quietly powerful hub — offering scalable space, a strategic location and infrastructure ideal for high-growth sectors. While other Midwest metros have gained national attention for headline-grabbing investments, Cleveland is carving out its own unique path to growth, supported by advanced industries, a skilled workforce and a strong real estate foundation. The region’s industrial market remains competitive and resilient, even amid broader economic headwinds. Despite the recent move-out of Joann Fabric’s 1.4 million-square-foot facility in Summit County, overall fundamentals remain healthy, and Class A space is in especially high demand.  For high-tech and manufacturing users seeking logistics-ready facilities in a cost-effective market, Cleveland delivers — offering the right mix of space, speed and strategic location that today’s industrial users are actively pursuing. A market of opportunity According to JLL’s second-quarter 2025 Cleveland Industrial Insights Report, total vacancy in the market sat at 3.8 percent. While this represents a slight uptick following Joann’s exit, it still signals robust market health. Class A availability is especially tight, driven by a wave of large leases signed in newly developed properties. That momentum is putting upward …

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IndustrialMarket ReportsMidwestMidwest Market ReportsOhio

Cincinnati Industrial Sector Sees Resilient Fundamentals Amid Short-Term Headwinds

by Kristin Harlow

By Andrew Jacob, Colliers The Cincinnati/Northern Kentucky industrial market demonstrated notable resilience in the second quarter of 2025, balancing strong long-term fundamentals with cautious short-term sentiment. Amid national headlines of slowing industrial demand and heightened uncertainty, the region continues to distinguish itself with a combination of strategic location, steady demand and disciplined development. Market fundamentals At the close of the second quarter, the market’s total inventory stood at approximately 293.6 million square feet, supported by a healthy vacancy rate of 5.2 percent, which remains below the national average of 7.1 percent. Bulk warehouse asking rates have remained relatively steady at $5.95 per square foot, reflecting a market rebalancing after several years of oversupply from robust development activity.  In contrast, flex space asking rates continue to climb, now averaging $8.11 per square foot. This upward pressure is fueled by a scarcity of new supply — driven by land constraints and elevated construction costs. The market recorded 539,000 square feet of positive net absorption in the second quarter, bringing the year-to-date total to over 1 million square feet. This consistent absorption highlights enduring occupier demand despite broader caution in the national market. New construction activity continued at a measured pace, with 2 …

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Market ReportsMidwestMidwest Market ReportsOfficeOhio

Niche Demand, Medical Momentum Define Second-Quarter Office Market in Cincinnati

by Kristin Harlow

By Brooke Jacobsen, Colliers The Greater Cincinnati and Northern Kentucky office market is weathering the post-pandemic era with surprising nuance. While national headlines continue to focus on uncertainty and high vacancy, the local market is quietly seeing stable, albeit selective, activity, especially in healthcare and specialized user segments. After a slow winter, leasing activity across the region began to thaw in the second quarter of 2025. Year-to-date net absorption remains slightly negative, but market sentiment is gradually shifting, particularly among small to mid-size tenants. Most of the deal activity is coming from users in the 2,500- to 5,000-square-foot range, with several groups focused on healthcare and logistics services. Cincinnati’s Class B and C office space is seeing an unexpected level of demand, driven by affordability, location flexibility and users with highly specific space needs. Medical office continues to stand out as one of the most active sectors. Demand is strong across both urban and suburban submarkets, with notable traction in Cincinnati submarkets. Much of the recent healthcare-related activity has come from specialty practices, private groups and regional health systems looking to reposition their outpatient services. While Northern Kentucky offers value, many users are choosing to locate on the Cincinnati side …

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Market ReportsMichiganMidwestMidwest Market ReportsRetail

Retail Realignment Continues Amid Muted Development, Diverging Tenant Demand in Detroit

by Kristin Harlow

By Ashish Vakhariya, Marcus & Millichap Detroit’s retail market continues to show pockets of strength amid broader economic and retail sector headwinds. More affluent northern suburbs and the revitalizing urban core have demonstrated greater resilience, while limited construction activity should support the backfilling of existing space. Detroit’s position among the highest-yielding metros in the country will likely remain a key draw for investors, with capital focusing on well-located, necessity-based and service-oriented retail assets. Big-box downsizing and rising cost pressures create a cautious leasing environment: Detroit’s retail landscape recorded more than 1 million square feet of negative net absorption over the nine months that ended in March, with preliminary second-quarter figures indicating continued space relinquishment. Strained consumer demand and structurally challenged retail formats have contributed to a wave of bankruptcies and consolidations among major tenants, including Party City, Big Lots, Macy’s and Walgreens.  Trade policy uncertainty has further heightened tenant caution, as elevated input costs are expected to weigh on leasing activity. A recent Michigan Retailers Association survey found that more than 60 percent of businesses statewide rely on imported goods.  With consumers more price-sensitive, many retailers may struggle to pass on higher costs; however, tenants reliant on locally sourced inventory …

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Market ReportsMidwestMidwest Market ReportsOffice

Smart Design, Outdoor Spaces and Sustainability Help Reimagine the Office

by Kristin Harlow

By Maria Davis and Colton Rupprecht, R&R Real Estate Advisors In the real estate industry, customer expectations around office space have undergone a significant shift — both in what they need and what they want. It’s not just about square footage anymore; it’s about how that space functions, feels and aligns with the values of the companies who occupy it.  This transformation is playing out in three critical areas: the rise of small, amenity-packed spaces; a surge in outdoor-focused design that brings the comforts of home into the workplace; and a more rooted and interactive approach to sustainability.  Smarter spaces As more companies return to in-office work, many are rethinking how they use space — prioritizing flight to quality. Increasingly, customers are gravitating toward compact offices that offer high-impact amenities rather than expansive square footage. These smaller footprints are more efficient, but they also demand more thoughtful design and planning. Technology is key in amenity designing, as efficient developers are integrating infrastructure that anticipates the needs of a tech-forward workforce. Whether it’s bracketing out spaces for high-speed fiber and built-in video conferencing hubs or artificial intelligence (AI)-powered building systems that manage lighting, the design is important in making a more …

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IndustrialIowaMarket ReportsMidwestMidwest Market Reports

Des Moines Industrial Market Starts to Chip Away at Vacancies

by Kristin Harlow

By Harrison Kruse and Ned Turner, CBRE As we near the second half of 2025, the Des Moines industrial market is starting to see a shift in fundamentals, as new deliveries and the pipeline of new big-box speculative warehouse product have come to a complete halt.  Like many cities in the upper Midwest post-COVID, the Des Moines MSA saw an influx of out-of-state developers backed by institutional capital go ground up with new big-box product when the economy was stimulated by the Federal Reserve reducing the federal funds rate below 1 percent. This resulted in historically compressed treasury yields and an abundant amount of liquidity injected into the capital markets.  This effect on the national economy escalated consumer demand for e-commerce and locally, ag-related products, which are the state of Iowa’s most valuable export on an aggregate basis.  The Des Moines MSA between 2021 and 2024 had more than 6.8 million square feet of new industrial space delivered to the market, which is about 10.2 percent of the total market size on a square-foot basis. During those years, net absorption increased on an annual basis between 800,000 and 1.5 million square feet.  Pre-COVID, Des Moines’s average net absorption was between …

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IllinoisMarket ReportsMidwestMidwest Market ReportsOffice

Spec Suites Surge, Investors Buy Office Again in Chicago

by Kristin Harlow

By Ben Azulay, Bradford Allen As summer approaches, I’m noticing Chicago’s downtown buzzing with renewed energy, and new signs that the Loop’s office market is heating up as well. In fact, research by my firm, Bradford Allen, suggests a Chicago office market nearing its bottom and poised for recovery.  Improved leasing activity, strategic landlord adaptations and discounted sales are reshaping downtown Chicago’s market, particularly in high-demand submarkets like the West Loop and Fulton Market. Client certainty Office tenants in downtown Chicago are demonstrating increased confidence about their space needs, as reflected in significant expansion deals and long-term commitments. In fact, office expansions drove at least five of the 10 largest leases signed during the first quarter, including Stripe more than doubling its footprint at 350 N. Orleans from 45,000 to 89,000 square feet and Blue Owl’s second expansion at 150 N. Riverside from 27,000 square feet to 54,000 square feet.  Large new leases included BP renewing 240,000 square feet at the CME Center, and Goldman Ismail signing a 43,000-square-foot deal at 191 N. Wacker. Leasing volume totaled 1.7 million square feet, up from 1.3 million square feet year-over-year, with the West Loop alone securing 916,760 square feet of leasing activity.  …

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IllinoisIndianaMarket ReportsMidwestMidwest Market ReportsMinnesotaMultifamilyWisconsin

Why Invest in Midwest Multifamily in 2025?

by Kristin Harlow

By Lee Kiser, Kiser Group Multifamily real estate investment in the Midwest in 2025 presents a compelling opportunity, driven by strong fundamentals, favorable market dynamics and emerging trends. Here’s an overview of the key trends and outlook. Strong rent growth Midwestern cities are experiencing some of the fastest rent increases in the nation. Cleveland leads with a 5.1 percent year-over-year rent growth, while other metros like Chicago, Kansas City and Detroit rank among the top 10 for rent gains, outperforming the national average. This surge is attributed to steady demand and limited new supply, allowing landlords to continue raising rents.  Much of the rent growth is due to declining construction activity. Nationally, multifamily construction is expected to decline by 11 percent in 2025, with completions projected to fall to 317,000 units. The Midwest has a significantly smaller pipeline than the national statistics, with only 3.4 percent of inventory currently under construction versus 6 percent nationally. Workforce housing stock The Midwest is recognized for its affordability, with monthly multifamily rents averaging $1,405, which is lower than the national average of $1,823 and more than 10 percent less than the Sun Belt average. Midwest transaction velocity is shifting toward Class B and …

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