St. Louis Office Market
| Average Asking Rent (Price/SF) | $21.97 |
| Vacancy Rate (%) | 14.5% |
| Net Absorption (SF) | -850,360 |
The St. Louis office market realized a decrease in asking rental rates in the first quarter of 2022, as rents fell by $0.07/SF to $21.97/SF from $22.04/SF in the fourth quarter of 2021. While asking rental rates continue to rise since the second quarter of 2019, tenants are often seeing more concessions in the form of free rent and tenant improvement allowances to offset the increase, as well as longer lease terms to accommodate the ever-increasing construction costs. As trailing 12-month inflation continues at levels twice the normal average, real asking rental rate growth is stagnant across many metro markets in the U.S. Market vacancy increased 110 basis points to 14.5% from the prior quarter an increase of 190 basis points from one year ago. Total net absorption in the quarter measured -850,360 square feet. Two properties in North County accounted for half of the negative absorption: Magellan Health, purchased by Centene for $2.2 billion, exited 223,500 square feet at 14100 Magellan Plaza in Maryland Heights; and the 227,740-square-foot space exited by Express Scripts at 8640 Evans Ave. in St. Louis County officially posted as negative absorption. One construction project underway during the quarter totaled 224,585 square feet. The Class A, Forsyth Pointe project in Clayton is currently 44.9% pre-leased. No projects were delivered to the market during the quarter.
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St. Louis Industrial Market
| Average Asking Rent (Price/SF) | $5.23 |
| Vacancy Rate (%) | 3.5% |
| Net Absorption (SF) | 1,452,553 |
The St. Louis industrial sector tightened in the first quarter of 2022. During this period, the market realized total net absorption of 1.5 million square feet. Overall vacancy decreased 60 basis points from the prior quarter to 3.5%, a historical record low, while average quoted rents significantly increased from $5.02/SF to $5.23/SF. Three properties delivered 647,750 square feet of product to the market during the quarter. Developments under construction increased significantly to 7.4 million square feet, as NorthPoint Development, the Sansone Group, TriStar Properties and Panattoni Development Company, Inc. began construction on various speculative projects during the past two quarters. Net absorption totaled 7.0 million square feet for the past four quarters, equating to a 49.0% increase from the annual average net absorption of 4.7 million square feet during the previous five years.
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