Office X Missouri

Everything pointing up for St. Louis offfice market

Everything pointing up for St. Louis office market,ph01
The Pennant Building under construction in the Ballpark Village development will be the first new Class-A office building in St. Louis in more than three decades.

Here are the basics for the St. Louis office market: Its vacancy rate fell during the second quarter of the year. And while that was happening, net absorption, construction and rental rates were rising.

So, yes, the St. Louis office market saw a strong second quarter.

Colliers International, in its second quarter St. Louis office report, said that the office vacancy rate in the St. Louis market fell to 13.27 percent in the second quarter. That’s down from 13.54 percent one year earlier.

The direct asking rental rate increased to $20.43 a square foot, a jump of 43 cents on a year-over-year basis.

And developers are staying busy. Colliers reported that almost 1.3 million square feet of office space is under construction in the St. Louis market. Centene’s 640,000-square-foot building in Clayton, Missouri, makes up half of this construction acivity.

The rest of the construction is mostly in the city of St. Louis itself, with 9.4 percent of new office construction taking place in the downtown CBD, 28.1 percent in Midtown and 9.8 percent in the outer edges of the city. As Colliers says, this is providing a boost to an office market that has historically struggled.

One of the bigger projects? The 120,000-square-foot office building under construction at Ballpark Village. This building will be the first new Class-A office building in downtown St. Louis in more than 30 years.

It was the St. Charles County submarket that saw the first significant office delivery of the year, though, with the completion of 1450 Beale Street at the Streets of St. Charles mixed-use development. Elekta, a medical-equipment provider, moved its headquarters from 13723 Riverport Drive in Earth City, Missouri, to this 60,000-square-foot Class-A building. Elekta occupies more than 36,000 square feet in this building.

The Clayton submarket remains particularly strong. Colliers reports that Class-A office asking rental rates are hovering near $30 a square foot here. This submarket’s current rate of $29.93 a square foot is the highest recorded average office rental rate in the history of the St. Louis market.

The Clayton market also saw the largest office sale of the second quarter. Virginia’s Lingerfelt CommonWealth Partners purchased the two Pierre Laclede buildings from KBS for nearly $160 a square foot. These two Class-A buildings total 580,000 square feet.