St. Louis 1Q25 Market Overview

Newmark Zimmer’s St. Louis market reports provide a comprehensive overview of current real estate conditions by sector and submarket. Newmark Zimmer is constantly monitoring market indicators, tracking and analyzing supply and demand drivers, cyclical patterns and industry trends. The following quarterly research data examines the multifaceted St. Louis commercial real estate market.

Net absorption in the first quarter of 2025 totaled 1.1 MSF for the St. Louis industrial market, bringing the past four quarters’ total to 5.3 MSF. This marks four consecutive quarters of positive absorption, as tenants capitalize on favorable conditions. The construction pipeline currently stands at 3.0 MSF, with 83% consisting of build-to-suit (BTS) projects. Speculative construction is expected to remain limited in 2025. Vacancy decreased 30 basis points to 4.1%, supported by positive net absorption from various mid- and large-sized deals in the Metro East and St. Charles County submarkets. This stable vacancy rate supports rental rate growth fundamentals and is likely to encourage developers to break ground on select projects in 2025.

The St. Louis office market tightened during the quarter with 120,441 SF of net absorption, bringing the four-quarter total to 531,811 SF. This marks three consecutive quarters of positive absorption, as tenants continue to capitalize on favorable conditions. The Clayton and West County submarkets registered 317,143 SF and 313,271 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 53,700 SF currently under construction. Vacancy declined 10 basis points to 12.9% during the quarter and is expected to remain stable in 2025 as the market recalibrates. Year-over-year, asking rental rates held steady, dropping by $0.01 to $22.76/SF.

The St. Louis retail market held steady in the first quarter of 2025, reflecting moderate leasing activity and resilience in the face of macroeconomic pressures. The overall vacancy rate remained flat at 3.5%, indicating a stabilized environment with measured demand and limited new supply. Net absorption posted a positive 72,000 square feet, supported by activity in the South County and West County submarkets. A total of 123,065 SF of net absorption posted during the quarter, supported by solid activity in the Metro East and West County submarkets.

The pace of investment activity in the St. Louis market slowed during the past four quarters, with sales volume totaling $1.9 billion, a decrease of 38.5% 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 68.2% of the Metro’s activity.

For a more detailed view of the industrial, office, retail and investment commercial real estate markets, please visit the research section of Newmark Zimmer’s website. Additionally, national reports and market insights are available online through Newmark.