The St. Louis office market remained steady through 2Q19. Overall market fundamentals are healthy – vacancy rates dropped from one year ago, asking rental rates remain high and construction activity continues to be the top story for the market.
The office market overall vacancy rate dropped slightly to 13.27%, down from 13.54% one year ago. The direct asking rental rate rose to $20.43 per square foot (PSF), a $0.43 increase year-over-year. Although the quarter saw positive absorption, the year-to-date absorption rate remains negative due to a few larges vacancies that became available in first quarter. Construction activity is still high with almost 1.3 million square feet (MSF) under construction. Centene’s large 640,000-SF building in Clayton makes up half of current construction activity. The rest of the construction is predominantly in St. Louis City (9.4% Downtown CBD, 28.1% Midtown and 9.8% Outer St. Louis City). This has provided a much-needed boost to a market that has historically struggled. The 120,000-SF office building at Ballpark Village will be the first new, Class A office building in downtown St. Louis in over thirty years.