ST. LOUIS, October 24, 2016 – Cushman & Wakefield announced today that the St. Louis industrial market experienced the highest positive absorption for a single quarter in the past 20 years, with 3.28 million square feet of positive absorption in the third quarter. This ranks St. Louis No. 7 in the U.S. for third-quarter net absorption.
“Limited blocks of available space across the metro area have sparked a flood of new development,” said Brian Ungles, Cushman & Wakefield Managing Principal. “Currently, there is 5.04 million square feet under construction, with 3.4 million square feet expected to be delivered in the fourth quarter. We are tracking signed deals that will lead to another 1.5 million square feet of positive net absorption due to occur in the fourth quarter, making 2016 the highest single year for absorption in St. Louis history.”
In addition, the St. Louis office market continues to tighten with 181,000 square feet of positive absorption in the third quarter. Year-to-date absorption is 685,000 square feet, the highest positive absorption in a single year since 2007.
- Quick Summary: Despite adding almost 3.2 million square feet of new inventory thus far in 2016, the vacancy rate has fallen 30 basis points to 6.4% due to absorption of nearly 3.4 million square feet.
- Growth Areas: Metro East is the strongest driver of demand with more than 1.5 million square feet of net absorption for the quarter, followed by North County with 874,000 square feet.
- Asking Rents: The average asking rent was $4.22 per square foot as compared to $4.21 in the third quarter of 2015.
- Outlook: Fourth quarter deliveries will provide tenants options to expand and relocate, but with leasing velocity remaining healthy, rental rates will likely increase. Charles County submarkets.
- Quick Summary: The vacancy rate has dropped to 12.4%, over 190 basis points lower than the end of 2015. Class A vacancy is at 9% for the first time since 2000, with suburban Class A vacancy at 7%.
- Growth Areas: The West County submarket had the highest amount of positive absorption in the third quarter with 61,000 square feet, followed by St. Louis City with 52,000 square feet.
- Asking Rents: The average asking rent was $19.39 per square foot as compared to $19.31 in the third quarter of 2015.
- Outlook: Class A space will continue to drive the market, and landlords will increase asking rates. Tenant demand remains focused on premier space; expect rental rate growth as the market continues its streak of strong leasing velocity.
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 43,000 employees in more than 60 countries help investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.