At first glance, the first quarter St. Louis office market report from Gershman Commercial Real Estate looks like a negative one. After all, office vacancies in the St. Louis market rose, net absorption fell and rental rates dipped during the quarter.
But when you look closely, you’ll see that these key numbers barely changed from the fourth quarter of 2019. This indicates a St. Louis office market that’s more holding steady than dropping.
Consider office vacancy rates. The overall office vacancy rate rose slightly to 10.8 percent at the end of the first quarter of this year. But the jump wasn’t a big one; At the end of the fourth quarter of 2018, this number stood at a nearly identical 10.4 percent.
Then there are asking rents. Gershman reported that the average quoted asking rental rate in the St. Louis office market ended the first quarter of 2019 at $20.35 a square foot. That compares to a nearly identical $20.70 a square foot at the end of the fourth quarter of last year.
Despite what looks like a sluggish market, developers are still building new office properties in the St. Louis market. Gershman said that more than 1 million square feet of office space remains under construction here. The biggest? Health insurance provider Centene’s campus expansion in nearby Clayton, the region’s hottest office market. This $770 million project will include new office space, residential living, ground-level retail, structured parking and a civic center with an auditorium.
Other big office projects under construction include the 200,000-square-foot City Foundry STL and the 184,500-square-foot Armory Building in the St. Louis City submarket.