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2021 Q2 St Louis Office Market Report

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2Q21 Office STL

Signs of Improvement

A post-Covid real estate market is finally upon us. The St. Louis office market is starting to show signs of improvement as overall net absorption, although still negative, is the best it has been since before the pandemic struck. Leasing activity has seen a boost especially the Downtown (CBD) and Clayton submarkets which had the highest leasing activity of all submarkets. Rental rates continue to climb despite the impact of the pandemic and are up by nearly a $1.00 per square foot (PSF) year-over-year.  

Despite these positive signs, the local office market has a long way to go to fully recover from the impact of the pandemic. Many office users remain reluctant to sign long-term deals. Mid-year data for St. Louis shows lease terms are averaging approximately five years. As office users continue to evaluate their space needs, many are electing to downsize and the amount of sublease space available has increased by more than 150,000 square feet (SF) in second quarter and is nearing one million square feet (MSF) for the entire market. To give relevance to this, sublease levels in 2019 were around 450,000 SF on average. Many sublease spaces have now been on the market for a year or longer. This is another sign that tenants do not think they will need as much space as they contemplate the work-from-home model or hybrid approach to occupying space.  St. Louis City currently has the highest concentration of sublease space available with over 250,000 SF. This is due in large part to Bank of America vacating 150,000 SF at Bank of America Plaza last year and Ansira leaving 130,000 SF at 2300 Locust Street this quarter. St. Louis is not alone in the dramatic increase in sublease space as it on the rise across the entire country.    


2Q21 Office

2021 Q2 St Louis Office Market Report

Download Report