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 (bps) from the previous quarter. From a capital markets perspective, this dynamic will support strong rental income potential for investors over the mid-term.