Thriving Market
The St. Louis industrial market continues to thrive as vacancy rates decreased for the 9th straight quarter. The Metro East submarket posted the lowest vacancy this quarter at 1.21%, followed by St. Charles County with 1.47%. Absorption stands at a positive 2.3 million square feet (MSF) year-to-date, the 25th consecutive quarter of positive absorption. The St. Louis City submarket led the way with 601,859 SF absorbed, followed by the Airport submarket with 178,029 SF. With these successes in the industrial market, we would typically expect to see asking rental rates increase. However, rates have remained relatively stable with a direct average rate of $5.42 per square foot (PSF), up nearly 16 % increase from one year ago.
Available space in existing buildings is becoming increasingly more difficult to find. There is currently 8.1 MSF under construction, and we expect most of that to be complete in 2022. New inventory will expand users’ options and may put pressure on landlords to compete.