ST. LOUIS, MO/March 26, 2017 (STLRealEstate.News) Though the St. Louis office market is looking strong today, there are “clouds” on the horizon, pundits warn, about upcoming changes and trends. After a solid 2016 that brought office vacancies to some of the lowest levels in more than 15 years, new construction, corporate downsizing, and a big downtown vacancy could slow the momentum. But, at this very moment, the fundamentals seem strong, and no one needs to panic about the fate of the St. Louis commercial industry.
Over the past few years, rents have consistently inched higher while the vacancy rate has declined for years. Local commercial real estate firms project a continuation of St. Louis’ typical slow but steady job gains. With stats to back up these claims, commercial real estate firm Cushman and Wakefield said the region ended 2016 with an overall vacancy rate for high-end properties at 8.6 percent, the lowest since 2000. Another commercial firm, CBRE, put the overall vacancy at 14.7 percent at the end of 2016, down from a high 17.6 percent just 6 years prior.
Even more staggering, in the more affluent St. Louis County neighborhoods, like Chesterfield and Clayton, the market for big chunks of top-of-the-line space is very tight, with vacancy rates just about 5 percent. These “Class A” rents have hit $30 per square foot in the highly desirable submarket and suburban community of Clayton today.
David Randolph of CBRE stated, “That’s a first for us in St. Louis, for us to have a $30-type number on a Class A building.”
But, it’s worth noting there are some big vacancies coming, with Centene opening a new office space in downtown Clayton as part of its massive campus expansion. The company plans to consolidate presences in their other buildings. The downtown AT&T Center is going to relocate, too, making a massive office building vacant.