Millennial Strength in the City Despite well-documented population loss in St. Louis over the past several decades, one critical generational demographic for the modern economy has recorded unprecedented growth within the City of St. Louis: Since 2010, the millennial demographic within the City has increased 11.9%. To put this in perspective, consider that between 2004 and 2014, St. Louis experienced a net population decline of over 30,000. At the same time, however, college graduates under age 35 grew by more than 14,400. Not only have millennials flocked to St. Louis in droves, but for the first time, this generation has replaced Generation X as the largest within the U.S. Labor force. This means that architects, developers, owners, and asset managers must adhere to the changing demands of a younger and more millennial workforce who prefer urban amenities at levels that far outpace that of their generational counterparts. Figure 1: [...]
Within the Urban Development Corridor (UDC), Cushman & Wakefield Research is tracking 35 development projects totaling over $4.1 billion in current or proposed developments. Though the number of developments within the UDC is impressive, the diversity of projects is perhaps most interesting. The following map displays just how variable construction activity has been across the UDC. UDC Development Overview - Figure 1 As portrayed in Figure 1, urban development in St. Louis is well-distributed within the corridor in both geography and purpose. Many of these projects represent a coordinated and long-term strategy on community development. The Lawrence Group, responsible for the City Foundry development in Midtown, recently acquired three lots along Forest Park Avenue. Smith, CEO of Lawrence Group, told the St. Louis Business Journal that he also had several parcels near the site owned by the Missouri Department of Transportation under contract. With additional office development being [...]
In the next three years, roughly 1,300 apartment units, 1,200 hotel rooms, more than 2.5 msf of office, and over $4b of developments are expected to deliver within the Urban Development Corridor (UDC). This 3.5-square-mile area stretching from Forest Park through Central West End, Cortex, Midtown and into the heart of Downtown has attracted investment the likes of which St. Louis City has not seen in many years, changing the very fabric of our urban core. As a result of the apparent shift in consumer, occupier and investor behavior, Cushman & Wakefield is launching a five-part series on Urban Revival in St. Louis in conjunction with our very own EdgeView, an interactive development tracker that will supplement the Urban Revival discussion. The EdgeView can be found here. Check in each week as our research platform dives into the dynamics supporting this revival as well as what projects look to have [...]
The St. Louis retail market has continued forward at a positive pace despite an ongoing trend of national bankruptcies, which say little of local shopper patterns but left significant vacancies in its wake. Despite this, St. Louis retail vacancy was 7.2% in the second quarter, falling below the long-term average by 130 basis points and driving rents more than 5% higher year-over-year. To read more about ongoing retail trends in St. Louis, click here.
The St. Louis industrial market continues to barrel ahead according to the latest Cushman & Wakefield research. In the second quarter, more than 2 million square feet of industrial space was absorbed, pushing vacancies below 6.0% for the fourth time since 2011 and the second time this year. At 5.8%, the industrial market’s vacancy rate was slightly above last year’s 5.6% but remains well below the historical average of 7.3% vacancy. For that and more insights into the current St. Louis industrial market, check out the Second Quarter Industrial Snapshot here.
Last quarter, Downtown St. Louis recorded its lowest office vacancy in years and while the market vacancy ticked up slightly in the second quarter, signs remain encouraging throughout the metro. The recorded vacancy at the end of the quarter was 12.5%, marking 14 consecutive quarters below the long-term average of 13.5%. Utilities and bio-tech industries have driven growth in the market and rents are expected to elevate over the mid-term. For more on the market, check out the Second Quarter Office Snapshot here.
The current economic cycle has resulted in major development projects in St. Louis, such as The City Foundry and Armory building, with little sign of a slowdown on the horizon. As employment rushes to the urban core, multifamily units have followed. With rents expected to rise and vacancies expected to decrease, the market remains one to watch for renters and investors alike. For more on the St. Louis multifamily market, check out our Second Quarter Market Insight report here.
Market Overview Construction in the St. Louis industrial market continued to be active with over 1.0 million square feet (msf) of new inventory delivered during the third quarter of 2018, bringing year-to-date deliveries above 3.5 msf. Developers remain aggressive, as strong tenant activity accounts for 3.5 msf of positive absorbed over the same period. These strong market overview fundamentals translated to healthy rent growth, as average asking rates ticked upwards to $4.96 per square foot (psf), an increase of $0.39 over the past six months. After posting nearly 170,000 square feet (sf) of positive absorption in the third quarter, St. Louis continues to benefit from a growing local economy and an emphasis on innovation. The city’s innovation hub, Cortex Innovation District, led absorption activity with roughly 96,000 sf of positive absorption at the recently built Cortex 3.0. Given healthy activity, the market’s vacancy of 12.0% fell by 30 basis points [...]
Highlighting lifestyle trends and the millennial effect, this perspective piece compares suburban and downtown locations; focuses on attracting educated workers; and explains how a sound real estate strategy should drive location decisions. Low unemployment rates are coupled with the growing need for tech savvy employees and forward-thinking perspectives on old products and services. New ideas are the precious raw materials—creating an intense focus on labor attraction efforts in the tech sector and technology jobs in traditional companies. Employers have responded by re-evaluating their location decisions and workplace experiences.
Visualizing the workplace in 2025 starts with the realization that planning for that reality starts today. People today can work from anywhere, at any time so offices now must compete with other workplace options. When workers do go into the office, they want a work environment to complement their work-life experience—and a place where they feel valued, connected and supported. It’s all about people—and workplace 2025 is closer than you think.