Newmark Zimmer’s St. Louis market reports provide a comprehensive overview of current real estate conditions by sector and submarket.

St. Louis Industrial Market – 2Q22

The St. Louis industrial sector tightened in the second quarter of 2022. During this period, the market realized total net absorption of 1.1 million square feet. Overall vacancy decreased 40 basis points from the prior quarter to 3.1%, a historical low, while average quoted rents increased slightly from $5.23/SF to $5.24/SF. No projects delivered to the market during the quarter; however, the development pipeline continues to expand. Developments under construction increased to 7.6 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 three quarters. Net absorption totaled 6.1 million square feet for the past four quarters, equating to a 36.1% increase from the annual average net absorption of 4.5 million square feet during the previous five years.

  • Average Asking Rent: $5.24/SF 
  • Vacancy Rate: 3.1% 
  • Net Absorption: 1,108,086 SF 
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St. Louis Office Market – 2Q22

The St. Louis office market realized a slight decrease in asking rental rates in the second quarter of 2022, as rents fell by $0.06/SF to $22.23/SF from $22.29/SF in the first quarter of 2022. While asking rental rates continue an upward trajectory since the second quarter of 2018, 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 ever-increasing construction costs. As trailing 12-month inflation continues at 40-year record levels, real asking rental rate growth is stagnant across many metro markets in the U.S. Market, vacancy increased 30 basis points to 14.9% from the prior quarter, equating to an increase of 200 basis points from one year ago. Total net absorption in the quarter measured negative 211,379 square feet.

  • Average Asking Rent: $22.23/SF 
  • Vacancy Rate: 14.9% 
  • Net Absorption: -211,379 SF 
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St. Louis Retail Market – 2Q22

The overall St. Louis retail market slightly tightened year-over-year in the second quarter of 2022, with vacancy decreasing 10 basis points to 5.4%. Net absorption totaled 475,556 square feet for the past four quarters and 624,051 square feet for the past two years. The average quoted rental rate is $13.90/SF, up $0.80/SF from one year ago. Amazon’s Prime Day officially ended with more than 300 million items purchased globally, a new record high. Acting as a potential barometer for retail consumption for the upcoming holiday sales season, the mid-year sales event was a surprising success. With inflation at 40-year highs in the U.S. and at record levels for many countries across the globe, consumers locked in nearly $1.7 billion in savings during the two-day event. Patient shoppers grabbed some highly-desired tech items at never-before-seen discounts, suggesting retailers are still able to persuade consumers to spend money on nonessential items in the face of a potential economic slowdown.

  • Average Asking Rent: $13.90/SF 
  • Vacancy Rate: 5.4% 
  • Net Absorption: 18,473 SF 
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2Q22 St Louis Capital Markets

St. Louis Capital Markets – 2Q22

The pace of investment activity in the St. Louis market significantly improved during the past four quarters, with sales volume totaling $4.3 billion, an increase of 45.1% compared to the prior year. As a leading second-tier market, the St. Louis Metropolitan area ranked eighth out of the largest thirteen Midwest markets in total sales volume during the past twelve months, with industrial and multihousing assets combining for 71.6% of the Metro’s activity. Capitalization rates decreased 30 basis points (bps) compared to the past twelve months, registering 5.9% in the second quarter of 2022. Top quantile capitalization rates decreased 20 bps compared to the past twelve months, registering 4.8% in the second quarter of 2022.

  • Class A Capitalization Rates: 5.9% 
  • 12-Month Total Sales Volume: $4.3 Billion 
  • 12-Month Total Transactions Volume: 322 Transactions 
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