St. Louis Industrial Market – 3Q25
Net absorption in the third quarter of 2025 totaled negative 193,343 SF, reducing the past four-quarter total to 760,670 SF. This marks the reversal of four consecutive quarters of positive absorption from 2Q24 to 1Q25, as tenants capitalized on favorable conditions. The construction pipeline currently stands at 4.4 MSF, with 94% consisting of build-to-suit (BTS) projects. Speculative construction is expected to remain limited in 2025. Vacancy climbed 20 basis points to 4.8% in 3Q25 and year over year, a decent result compared to other U.S. industrial markets which experienced 50+ bps increases during the same period. The stability in vacancy since 1Q23 supports rental rate growth fundamentals and is spurring developers to explore select development options.
The region’s labor market loosened as macroeconomic conditions shifted. August’s unemployment rate increased to 4.7%, 40 basis points above the national average of 4.3%. Year-over-year, job growth was strongest in the Education and Health sector, followed by Leisure and Hospitality. Information and Manufacturing posted the largest job losses over the past 12 months. Industrial firms are recalibrating their workforce needs. Locally, employment increased in one of three key industrial sectors: Construction by 0.6%.
- Average Asking Rent: $5.94/SF
- Vacancy Rate: 4.8%
- Net Absorption: -193,343 SF
St. Louis Office Market – 3Q25
The market loosened during the quarter with negative 392,241 SF of net absorption, bringing the four-quarter total to negative 65,588 SF. This marks six out of the past twelve quarters with positive absorption, as tenants continue to reassess market conditions. The West County and Clayton submarkets registered 237,894 SF and 200,984 SF of net absorption, respectively, over the past year. The non-owner-occupied construction pipeline has remained inactive since the third quarter of 2022, with just 69,000 SF currently under construction. Vacancy increased 50 basis points to 13.9% during the quarter but is expected to remain stable in 2026 as the market recalibrates. Year-over-year, asking rental rates dropped 3.3% to $22.28/SF.
The region’s labor market loosened as macroeconomic conditions shifted. August’s unemployment rate increased to 4.7%, 40 basis points above the national average of 4.3%. Year-over-year, job growth was strongest in the Education and Health sector, followed by Leisure and Hospitality. Information and Manufacturing posted the largest job losses over the past 12 months. Professional business and technology firms are reassessing their workforce needs, with local employment declining in all three office-occupying sectors compared to the prior year.
- Average Asking Rent: $22.28/SF
- Vacancy Rate: 13.9%
- Net Absorption: -392,241 SF
St. Louis Retail Market – 2Q25
St. Louis faced headwinds in the second quarter of 2025 as consumer sentiment dipped significantly, part of a national trend that saw declines in 45 of 47 U.S. metro areas. Although net absorption remained positive, tariff-driven uncertainty weighed on leasing activity, particularly in discretionary retail categories. Regional tenants have become more cautious, lengthening deal timelines and demanding additional landlord concessions. Retail landlords in St. Louis are navigating a more restrained climate. Construction and operating costs continue to climb, and tenants are requesting shorter lease terms or increased flexibility to manage potential slowdowns.
- Average Asking Rent: $14.61/SF
- Vacancy Rate: 3.5%
- Net Absorption: 101,680 SF
St. Louis Capital Markets – 2Q25
The pace of investment activity in the St. Louis market slowed during the past four quarters, with sales volume totaling $2.1 billion, a decrease of 33.4% compared with the prior five-year average. As a leading second-tier market, the St. Louis Metropolitan area ranked seventh out of the largest 13 Midwest markets in total sales volume during the past 12 months, with multifamily and industrial assets combining for 69.8% of the Metro’s activity.
- 12-Month Capitalization Rates: 7.6%
- 12-Month Total Sales Volume: $2.1 Billion