Construction of new office space in St. Louis has surged so far in 2018, while the city’s industrial market continues to absorb space at an impressive clip.
This is according to first-quarter research from Cushman & Wakefield.
Cushman & Wakefield reported that during the first quarter of the year, the St. Louis office market recorded 56,000 square feet of positive absorption while the industrial market notched 808,000 square feet.
This comes despite an increase in new development in both sectors, said Brian Ungles, managing princpal with the St. Louis office of Cushman & Wakefield.
“Development activity has been the biggest story during the past several years,” Ungles said in a written statement.
Cushman & Wakefield said that 4.6 million square feet of new industrial construction and 571,000 square feet of office construction rose in the St. Louis market in 2017. That trend is continuing in the first quarter of this year, with 1.5 million square feet of office space and 6.2 million square feet of industrial under construction.
The office market is seeing more speculative construction, with 411,000 square feet of the 1.5 million square feet under construction falling into that category. On the industrial side, build-to-suit accounts for 76.7 percent of the new construction in the first quarter.
The Metro East submarket has 2.8 million square feet of industrial space under construction, and the St. Charles County submarket has more than 1.6 million square feet being built.
Cushman & Wakefield reported that the office vacancy rate fell to 11.4 percent in the St. Louis market during the first quarter. That is 70 basis points lower than were this figure stood at the end of 2016.
Class-A gross average office asking rents ended the quarter at $21.89 a square foot.
In the industrial sector, triple-net asking rents jumped 2.7 percent year-over-year, hitting $4.57 a square foot.
