ST. LOUIS, July 12, 2016 – Cushman & Wakefield announced today that the St. Louis industrial market has more than 5.6 million square feet of space currently under construction and has completed over 2.05 million square feet year-to-date.
“There has never been more industrial space under construction at one time in the last 15 years than there is now in the St. Louis market,” said Brian Ungles, Cushman & Wakefield Managing Principal. “A combination of strong absorption and historically low vacancy rates are pushing developers and tenants to build.”
In addition, the St. Louis office market experienced record absorption in the second quarter, ending with 355,000 square feet of positive absorption.
“This brings year-to-date absorption to 554,000 square feet, dropping the vacancy rate by 180 basis points in the last six months to 12.6%, the lowest vacancy rate in St. Louis since 2001,” said Mr. Ungles.
• Quick Summary: The St. Louis industrial market has recorded year-to-date net absorption of 303,000 square feet and will experience significant absorption in the remainder of 2016.
• Growth Areas: North County remains poised for a surge of activity later in the year with over 2.24 million square feet of space under construction.
• Vacancy Rates: Vacancy rates rose 40 basis points to end the quarter at 7.3%, with the completion of three speculative buildings this quarter totaling 1.1 million square feet.
• Outlook: Build-to-suits make up 59% of the space under construction, signifying over 3 million square feet of absorption over the next 12 months. St. Charles County submarkets.
• Quick Summary: As the St. Louis area’s economy continues to expand, demand for additional office space will grow, causing increased rents and lower vacancy.
• Growth Areas: The West County submarket had the highest amount of positive absorption in the second quarter with 215,000 square feet, followed by Downtown with 82,000 square feet.
• Asking Rents: The average gross asking rate for Class A office space was $22.89 and $16.45 for Class B space.
• Outlook: Tenant demand remains focused on premier space; expect rental rate growth as the market continues its streak of strong leasing velocity. Suburban markets will experience high absorption over the next several years with the announcements of new construction in Clayton and West County.
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