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

St. Louis Industrial Market – 4Q22

The St. Louis industrial sector tightened in the fourth quarter of 2022. During this period, the market realized total net absorption of 459,829 square feet. Net absorption totaled 6.0 million square feet for the past four quarters, equating to a 66.7% increase from the annual average net absorption of 3.6 million square feet during 2017 through 2020. Vacancy increased 70 basis points from the prior quarter to 3.8%, while average quoted rents increased from $5.63/SF to $5.75/SF. A total of 14 properties delivered 4.4 million square feet of product to the market during the quarter, the highest amount of deliveries dating back to 2017. As a result, developments under construction decreased significantly, from 8.4 million square feet to 3.9 million square feet. NorthPoint Development, the Sansone Group, TriStar Properties and Panattoni Development Company, Inc. began construction on various speculative projects during 2022.

  • Average Asking Rent: $5.75/SF 
  • Vacancy Rate: 3.8% 
  • Net Absorption: 459,829 SF 
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St. Louis Office Market – 4Q22

The St. Louis office market realized a slight decline in asking rental rates in the fourth quarter of 2022, as rents decreased by $0.22/SF to $22.80/SF, down from $23.02/SF in the third quarter of 2022. Due to interest rate hikes and inflation affecting landlords in the form of higher construction costs, repair costs and CAM charges, rental rates are projected to rise in 2023. However, as trailing 12-month inflation continues at 40-year record levels, real asking rental rate growth remains stagnant across many metro markets in the US. To offset the higher rates, tenants are often seeing more concessions in the form of free rent and tenant improvement allowances, as well as longer lease terms to accommodate the ever-increasing construction costs. Market vacancy in the fourth quarter of 2022 increased 200 basis points to 18.1% from the prior quarter, for an increase of 320 basis points from one year ago. Total net absorption in the quarter measured negative 79,685 million square feet. Two Class A projects, Forsyth Pointe and Commerce Tower, both located in Clayton delivered to the market.

  • Average Asking Rent: $22.80/SF 
  • Vacancy Rate: 18.1% 
  • Net Absorption: -79,685 SF 
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3Q22 St Louis Retail Report

St. Louis Retail Market – 3Q22

The overall St. Louis retail market slightly tightened year over year in the third quarter of 2022, with vacancy decreasing 10 basis points to 5.1%. Net absorption totaled 314,334 square feet for the past four quarters and 723,659 square feet for the past two years. The average quoted rental rate is $14.18/SF, up $0.77/SF from one year ago.

  • Average Asking Rent: $14.18/SF 
  • Vacancy Rate: 5.1% 
  • Net Absorption: 259,165 SF 
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St. Louis Capital Markets – 3Q22

The pace of investment activity in the St. Louis market improved during the past four quarters, with sales volume totaling $4.3 billion, an increase of 11.0% 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 multifamily and industrial assets combining for 69.6% of the Metro’s activity. Capitalization rates decreased 32 basis points (bps) compared to the past twelve months, registering 5.9% in the third quarter of 2022. Top quantile capitalization rates decreased 51 bps compared to the past twelve months, registering 4.7% in the third quarter of 2022.

  • Class A Capitalization Rates: 5.9% 
  • 12-Month Total Sales Volume: $4.3 Billion 
  • 12-Month Total Transactions Volume: 280 Transactions 
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