In Part-One and Part-Two, we discussed the Urban Development Corridor (UDC) and some of its unique qualities that make it an ideal location for office occupiers.
Across the U.S., the coworking industry has thrived on the heels of increased demand for employee experience. St. Louis itself has seen a recent expansion into the market from the leading coworking provider in the world, WeWork, which recently took 60,000 square feet (sf) at the Metropolitan Square building Downtown.
For a firm that is less than a decade old, WeWork’s many successes represent a prime example of the rise in demand for employee experience. Though coworking has existed for many years in different forms (Regus, for example, started in 1989), it was not until recently that the ramp-up of coworking became apparent. To demonstrate this exponential growth, consider Figure 1 on right:
Roughly half of the 50+ msf of coworking space in the U.S. has opened since mid-2015. But despite the proliferation of coworking in many of the largest markets across the nation, St. Louis has yet to see the activity of comparable markets. Ranking 20th in overall coworking square footage and just 13th among secondary markets, St. Louis’s coworking industry certainly has space to grow.
Though many major coworking firms have yet to expand into St. Louis, this does not necessarily mean that the industry has suffered. In fact, the opposite is true of coworking in St. Louis and especially within the urban core. Of the estimated 1.0msf of coworking space in St. Louis, over 60% of it falls within the City – a number that’s sure to increase in tandem with momentum seen throughout the UDC. Based on this sentiment, it’s simply a matter of “when”, not “if” the market attracts the likes of Knotel or compels further expansion from WeWork and Spaces.
Despite coworking’s potential in St. Louis, it’s clear that the market cannot simply rely on expansion from a single industry to drive future growth. The good news is that St. Louis is well-positioned across several industries to push the economy forward. Over the mid-term, continued investment from hospital systems, local universities and the Cortex Innovation District should drive further bio-tech innovation. Additionally, the National Geospatial-Intelligence Agency’s (NGA) new $1.7b headquarters delivering in 2023 has the potential to create a geospatial ecosystem through active university partnerships and awarding government contracts to local tech players. To put the impact of NGA in perspective, the agency has awarded nearly $5.0b in private contracts since 2016.
Given the continued potential for net new growth across the bio-tech, geospatial technology and coworking industries, St. Louis can no doubt expect to see further commercial expansion within the Urban Development Corridor.
Tune in next week as we discuss the importance of adaptive reuse as it relates to urban revival in St. Louis. To see some of the most important adaptive reuse projects in St. Louis and how they are changing the fabric of the urban core, check out our interactive development tracker, EdgeView, a better way to view the momentum.