ST. LOUIS, January 24, 2017 – Cushman & Wakefield announced today that in 2016 the St. Louis industrial market experienced the highest amount of annual positive absorption for the past 30 years, with 4.97 million square feet. In the fourth quarter alone, 1.83 million square feet were absorbed.
“On top of a record year of absorption, we also saw a record year of inventory,” said Brian Ungles, Cushman & Wakefield Managing Principal. “After adding 3.20 million square feet of new inventory in the first three quarters, another 2.82 million square feet were added in the fourth quarter – bringing the total new inventory to 6.01 million square feet for the year. This is the highest amount of new construction since 2001 when 6.05 million square feet were delivered.”
In addition, the office market ended the fourth quarter with 194,000 square feet of positive absorption, bringing the year-end total to 872,000 square feet. It was the seventh straight quarter with more than 145,000 square feet of positive absorption, decreasing the vacancy rate to 11.9%, the lowest since 2001.
Q4 2017 Highlights by Industry Sector
(Click here to view the industrial report and the office report.)
- Quick Summary: After adding 3.66 million square feet of new speculative inventory in 2016, the vacancy rate increased slightly to end the year at 6.6%, although that’s still well below the historic average of 8%.
- Growth Areas: St. Charles County was the strongest driver of demand with 735,000 square feet of net absorption for the quarter, followed by North County with 504,000 square feet.
- Asking Rents: The average asking rent was $4.28 per square foot as compared to $4.22 in the fourth quarter of 2015.
- Outlook: The completion of speculative construction will lead to large transactions in the Metro East, North County and St. Charles County submarkets. Vacancy rates will rise temporarily due to new inventory being added to the market, however, asking rates will continue to increase.
- Quick Summary: The year-end vacancy rate dropped to 11.9%, over 360 basis points lower than the end of 2014.
- Growth Areas: The West County submarket had the highest amount of positive absorption in the fourth quarter with 146,000 square feet.
- Asking Rents: Asking rates in Clayton average 24% higher than the rest of the St. Louis area, with the highest asking rates pushing $33 per square foot full service.
- Outlook: Tenants, who need quality space immediately, are facing an increasingly tighter market. Accelerated rental rate growth is expected as the market approaches record low vacancy rates.
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.