Office Sector
The Akron office market has a vacancy rate of 6.6% as of the fourth quarter of 2024. This time last year, the market had the same rate of vacancy. The year over year change in the Akron vacancy rate was a result of 4,200 SF of net delivered space and 280,000 SF of net absorption over the past year.
Akron’s vacancy rate of 6.6% compares to the market’s five-year average of 6.5% and the 10-year average of 6.2%.
The Akron office market has roughly 3.5 million SF of space listed as available, for an availability rate of 10.2%. As of the fourth quarter of 2024, there is 140,000 SF of office space under construction in Akron. In comparison, the market has averaged 130,000 SF of under construction inventory over the past 10 years. The Akron office market contains roughly 33.8 million SF of inventory. The market has approximately 4.9 million SF of 4 & 5 Star inventory, 14.8 million SF of 3 Star inventory, and 14.1 million SF of 1 & 2 Star inventory.
Market rents in Akron are $16.50/SF. Rents average around $23.00/SF for 4 & 5 Star buildings, $17.00/SF for 3 Star properties, and $13.70/SF for 1 & 2 Star assets. Rents have changed by 1.5% year over year in Akron, compared to a change of 1.0% nationally. Market rents have changed by 1.7% in 4 & 5 Star buildings year over year, 1.2% in 3 Star buildings, and 1.8% in 1 & 2 Star buildings. Annual rent growth of 1.5% in Akron compares to the market’s five-year average of 2.1% and its 10-year average of 2.0%.
Industrial Sector
Akron’s industrial market is on solid footing heading into the second half of 2024. Unlike national trends where record-level speculative development pushed vacancy higher, a relatively limited amount of new supply and solid demand has kept vacancy in Akron in line with typical levels for the market.
Through the first half of 2024, net absorption totaled 840,000 SF which is more than double the average over the same period in the five year preceding the pandemic. Meanwhile, deliveries totaled 400,000 SF, which was 50% above the pre-pandemic average. As demand outpaced supply, vacancy fell 40 basis points quarter over quarter to 3.2%, which is among the tightest vacancy rates of markets in the region.
The market’s tight availability weighs on leasing volume. Around 220,000 SF was leased in 24Q2, making it one of the weakest quarters for leasing volume over the past decade. Limited availability will continue to dampen industrial demand in Akron as the development pipeline remains muted.
Around 190,000 SF is under construction, the lowest level in a decade. High interest rates continue to weigh on construction starts and the pace of deliveries will remain limited over the near term. As a share of market inventory, construction in Akron represents 3.2% compared to the national benchmark of 6.8%.
Similar to the national trend, industrial rent growth in Akron is decelerating, and annual growth averages 2.8%, still a healthy figure for the market. Manufacturing space is supporting rent growth in Akron, with gains of 0.8%, reflecting tight vacancies and strong demand for modern manufacturing space.
Retail Sector
The Akron retail market has a vacancy rate of 3.4% as of the fourth quarter of 2024. This time last year, the market had a vacancy rate of 2.8%. The year over year change in the Akron vacancy rate was a result of 47,000 SF of net delivered space and -240,000 SF of net absorption over the past year.
Akron’s vacancy rate of 3.4% compares to the market’s five-year average of 3.3% and the 10-year average of 3.6%.
Among the retail subtypes, neighborhood center vacancy stands at 5.7%, power center vacancy is 4.7%, strip center vacancy is 5.1%, mall vacancy is 7.5%, and general retail vacancy is 2.0%. The Akron retail market has roughly 2.1 million SF of space listed as available, for an availability rate of 4.4%.
As of the fourth quarter of 2024, there is 21,000 SF of retail space under construction in Akron. In comparison, the market has averaged 120,000 SF of under construction inventory over the past 10 years. The Akron retail market contains roughly 48.2 million SF of inventory. The market has approximately 10.5 million SF of neighborhood center inventory, 4.5 million SF of power center inventory, 3.0 million SF of strip center inventory, 780,000 SF of mall inventory, and 29.0 million SF of general retail.
Market rents in Akron are $14.00/SF. Rents have changed by 0.4% year over year in Akron, compared to a change of 2.2% nationally. Market rents have changed by 0.3% in neighborhood center properties year over year, 1.7% in power center properties, 0.1% in strip center properties, 0.9% in mall properties, and 0.2% in general retail properties. Annual rent growth of 0.4% in Akron compares to the market’s five-year average of 2.9% and its 10-year average of 1.8%.
Akron Economy
As Akron, Ohio enters the fourth quarter of 2024, its economic outlook reflects a mix of stability and cautious optimism. The region continues to benefit from its diversification efforts, with healthcare, education, and advanced manufacturing sectors providing a solid foundation. Growth in healthcare, driven by major employers like Akron Children’s Hospital, is helping sustain local job creation, while investments in education and research, particularly at the University of Akron, are fostering innovation. However, ongoing challenges with labor shortages and inflationary pressures could temper growth, especially in manufacturing and small businesses.
In terms of commercial real estate, Akron’s market has shown resilience, though it faces some headwinds going into late 2024. Office space demand remains subdued, as remote and hybrid work models persist. There has been a growing interest in adaptive reuse projects, with older office buildings being repurposed into mixed-use developments or residential spaces to meet the demand for downtown living. Retail properties are also undergoing transformation, with a focus on creating experiential destinations to attract consumers. Industrial real estate, particularly in logistics and distribution, remains a bright spot due to Akron’s strategic location and access to transportation networks.
Looking ahead, the outlook for Akron’s commercial real estate market in the fourth quarter will likely hinge on broader economic conditions and interest rate trends. The Federal Reserve’s decisions on interest rates could influence financing for new developments and property acquisitions. If inflation eases and borrowing costs stabilize, Akron may see increased investment in industrial and mixed-use properties. However, commercial landlords may continue to face challenges with vacancies, particularly in the office sector, as businesses reevaluate their space needs. Despite these uncertainties, Akron’s ongoing revitalization efforts and strategic investments in key sectors position the city for steady, albeit moderate, growth.