The St. Louis industrial market had more then three million square feet of absorption in the third quarter. Find out more in our latest Industrial Outlook.
2. Annual change of industrial employment
Source: JLL Research, BLS
Construction deliveries (in millions s.f.)
Source: JLL Research
YTD absorption by submarket (in millions s.f.)
Source: JLL Research
Industrial employment shows some softening
Employment in the industrial sectors is continuing its positive trend after
bottoming out in early 2012, but the growth rate has begun to slow as of late.
Mining output, particularly coal production across Missouri and Illinois, is down
27.3 and 43.6 percent over the past year according the Federal Reserve.
Manufacturing employment continued to slip as durable goods employment
shrunk by 4.9 percent in the last 12 months. The region does have a growing
construction sector. The value of building permits across the region is up 12.0
percent from 2015 and are over a billion dollars year to date.
Millions more of new construction still to come in 2016
Construction activity continued to move full steam ahead as the third quarter
concluded. Over 3.5 million square feet have delivered this year, and another 3.4
million square feet is set to finish in the fourth quarter. South County is adding its
first spec building to the development cycle as Fenton Logistics Park kicked off
the redevelopment of the former Chrysler plant with a 158,000-square-foot
warehouse. New development, coupled with growing occupancy, has pushed
warehouse asking rates up 4.4 percent in the past year.
Absorption concentrated in submarkets with new construction
After a huge third quarter, year-to-date absorption has exceeded four million
square feet, the most in more than 10 years. The commencement of Amazon’s
two fulfilment centers in Edwardsville and Schnuck’s warehouse in North County
added 2.5 million square feet to occupancy. Boeing added a new manufacturing
facility at its North County campus while Knapheide and Ole Tyme Produce each
completed build-to-suit projects in St. Charles County. Absorption will continue to
increase in the fourth quarter, but expect vacancy to move up slightly as several
vacant buildings deliver.
New buildings continue to drive occupancy growth
Industrial Insight
St. Louis | Q3 2016
3,222,594
Quarterly absorption (s.f.)
2,786,129
Warehouse absorption (s.f.)
3,637,968
Total deliveries YTD
4,178,110
Total under construction (s.f.)
5.6%
Total vacancy
2,263,330
Speculative construction (s.f.)
4.4%
Growth in warehouse rents Y-o-Y
51.0%
Total preleased
-1
0
1
2
Metro East North
County
Mid
County
St.
Charles
County
Other
Counties
West
County
South
County
-1.0%
0.0%
1.0%
2.0%
3.0%
2013 2014 2015 2016
0
1
2
3
4
2013 2014 2015 YTD 2016
(1
1
2
3. Industrial Leasing Activity Report
St. Louis
Q3 2016
This report analyzes all closed industrial leases > 30,000 s.f.
14
1,444,246
1,310,853
133,393
-
49
7,065,893
Avg. building
construction date
824,602
0
220,519
101,829
297,296
0
Top 10 lease transactions during the quarter
Size Building status Year built
406,497 Existing 1999
179,712 Existing 2002
133,393 Existing 1900
109,704 Existing 1998
105,000 Existing 2001
90,696 Existing 2006
68,000 Existing 1997
66,829 Existing 2015
55,693 Existing 2016
53,626 Existing 1997
DPI, Inc.
7 Gateway Commerce Center Metro East
United Scrap Metal
DirectNorth CountyLegacy Pharmaceutical 13600 Shoreline
Johnson Controls 3159-3195 S. Rider Trail North County Direct
Linn Star Transport 306 Hazelwood Logistics Center Dr North County Direct
Trans-Lux 6102-6110 Aviator Dr North County Direct
Monsanto 641 Lambert Pointe Drive North County
Owens and Minor
Direct
Reaction Auto Parts 11701 Missouri Bottom Rd North County Direct
Direct
Lease type
14 Gateway Commerce Center Dr Metro East Direct
3808 Weber Rd South County
St. Louis City1020 N 23rd St Direct
Sublease
OHL
Tenant Address Submarket
Avg. lease size (in s.f.)
Expansion in market
Expansion in building
Renewal
Extension (< 36-month term)
Relocation within market
New to market
Leasing activity by submarket QTD
At a glance
Total leases QTD
Total s.f. leased QTD
Leasing activity by size QTD
Total s.f. leased QTD:
Warehouse/Distribution
Leasing activity QTD
1990
Total s.f. leased QTD:
Manufacturing
Leasing activity by transaction type QTD
Total s.f. leased QTD:
Special Purpose
Total leases YTD
103,160
Total s.f. leased YTD
60.3%
14.3%
15.3%
3.7%
6.4%
Metro East
Mid County
North County
South County
St. Louis City
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Historical leasing activity
- 1 4 6 3
-
100,000
200,000
300,000
400,000
500,000
600,000
500,000+ 250,000-499,999 100,000-249,999 50,000-99,999 10,000-49,999
Total leased Number of leases
Source: JLL Research 2016 Jones Lang LaSalle IP, Inc. All rights reserved.
4. Industrial Development Report
St Louis
Q3 16
This report analyzes all industrial developments under construction & new deliveries > 30,000 s.f.
Total leased at delivery (%) 68.9%
Total speculative at delivery (s.f.) 2,019,788
Total BTS at delivery (s.f.) 1,083,500
Total Owner-User at delivery (s.f.) 534,680
Total # of properties delivered 11
Asking rental rate (low - high) $0.00 - $0.00
Top 5 projects delivered to date
Building RBA (s.f.) Delivery date
Leased at
delivery (%)
Schnuck's Distribution Center 923,500 Q3 2016 100%
3931 Lakeview Corporate Drive 769,500 Q2 2016 0%
Gateway East 717 717,000 Q1 2016 0%
Boeing 777X Facility 424,000 Q3 2016 100%
Hazelwood Logistics Center I 199,288 Q2 2016 59%
Total pre-leased (%) 51.0%
Total speculative under construction (s.f.) 2,263,330
Total BTS under construction (s.f.) 1,914,780
Total Owner-user under construction (s.f.) -
Total # of properties UC 7
Asking rental rate (low - high) $4.45 - $5.95
Top 5 projects currently under construction
Building RBA (s.f.) Delivery date Pre-leased (%)
GM Supplier Building 1,200,000 Q4 2016 100%
2001 Premier Parkway 714,780 Q4 2016 100%
Gateway East 620 624,150 Q1 2017 0%
NorthPark DC I 538,000 Q4 2016 0%
Gateway East 520 520,980 Q4 2016 41%Speculative
Speculative
Owner Construction type
Speculative
Tristar
Northpark Partners
Tristar
Duke Realty
Northpoint
BTS
BTS
Metro East
North County
Metro East
St. Charles County
St. Charles County
Historical deliveries (s.f.)
Construction typeOwnerSubmarket
North County
North County
Metro East
Metro East
North County
Northpoint
Boeing
Tristar
Panattoni Development
USAA
Speculative
Speculative
New deliveries
Completions in-depth
3,637,968
Total delivered YTD (s.f.)
Owner-user
Speculative
BTS
Submarket
Under construction
4,178,110
Under construction (s.f.)
Under construction in-depth
Upcoming deliveries by year (s.f., excludes YTD completions)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
2010 2011 2012 2013 2014 2015 YTD 2016
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
2016 2017
BTS Owner-user Speculative
Source: JLL Research 2016 Jones Lang LaSalle IP, Inc. All rights reserved.
5. Industrial Statistics
St. Louis | Q3 2016
Inventory
(s.f.)
Quarterly
total net
absorption
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
vacancy
(%)
Total
availability
(%)
Average
total asking
rent
($ p.s.f.)
Quarterly
completions
(s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Market Totals
Warehouse & Distribution 150,890,559 2,786,129 3,752,775 2.5% 6.3% 10.7% $4.02 1,034,180 3,213,968 4,178,110
Manufacturing 62,492,603 436,465 423,941 0.7% 3.7% 6.6% $2.97 424,000 424,000 0
Total Industrial 213,383,162 3,222,594 4,176,716 2.0% 5.6% 9.5% $3.78 1,458,180 3,637,968 4,178,110
Submarkets
Metro East
Warehouse & Distribution 25,341,999 1,687,944 1,455,933 5.7% 2.4% 5.1% $3.98 0 1,486,500 1,145,130
Manufacturing 9,583,454 0 30,150 0.3% 0.9% 2.1% $4.65 0 0 0
Total Industrial 34,925,453 1,687,944 1,486,083 4.3% 2.0% 4.3% $4.05 0 1,486,500 1,145,130
St. Louis City
Warehouse & Distribution 39,287,771 -176,597 -70,047 -0.2% 9.6% 16.6% $2.80 0 125,000 959,800
Manufacturing 18,755,909 -42,708 -102,487 -0.5% 9.2% 14.4% $2.37 0 0 0
Total Industrial 58,043,680 -219,305 -172,534 -0.3% 9.5% 15.9% $2.61 0 125,000 959,800
Mid County
Warehouse & Distribution 22,359,130 204,124 516,575 2.3% 4.7% 6.6% $3.75 0 0 0
Manufacturing 5,820,995 -15,886 108,599 1.9% 0.3% 1.4% $3.99 0 0 0
Total Industrial 28,180,125 188,238 625,174 2.2% 3.8% 5.6% $3.88 0 0 0
South County
Warehouse & Distribution 8,291,415 10,873 103,373 1.2% 4.3% 11.3% $5.77 0 0 158,400
Manufacturing 4,113,587 19,146 -134,014 -3.3% 4.2% 9.4% $4.22 0 0 0
Total Industrial 12,405,002 30,019 -30,641 -0.2% 4.3% 10.6% $5.95 0 0 158,400
West County
Warehouse & Distribution 2,551,795 19,829 18,647 0.7% 1.5% 1.6% $3.90 0 0 0
Manufacturing 2,799,134 689 11,469 0.4% 0.1% 9.0% $5.43 0 0 0
Total Industrial 5,350,929 20,518 30,116 0.6% 0.8% 5.4% $4.04 0 0 0
North County
Warehouse & Distribution 33,073,383 888,406 1,026,260 3.1% 9.7% 15.2% $4.15 923,500 1,193,788 0
Manufacturing 9,156,923 428,424 428,424 4.7% 0.1% 0.8% $3.00 424,000 424,000 0
Total Industrial 42,230,306 1,316,830 1,454,684 3.4% 7.6% 12.1% $4.08 1,347,500 1,617,788 0
St. Charles County
Warehouse & Distribution 12,826,591 117,950 364,311 2.8% 2.3% 3.5% $4.38 110,680 248,680 1,914,780
Manufacturing 8,115,858 0 35,000 0.4% 0.7% 1.4% $4.41 0 0 0
Total Industrial 20,942,449 117,950 399,311 1.9% 1.7% 2.7% $4.38 110,680 248,680 1,914,780
Other Counties
Warehouse & Distribution 7,158,475 33,600 337,723 4.7% 2.9% 4.9% $2.74 0 160,000 0
Manufacturing 4,146,743 46,800 46,800 1.1% 6.7% 7.9% $2.94 0 0 0
Total Industrial 11,305,218 80,400 384,523 3.4% 4.3% 6.0% $2.84 0 160,000 0
Blaise Tomazic Research Manager
211 N Broadway, St. Louis, MO 63102 tel +1 314 261 7377 blaise.tomazic@am.jll.com
2016 Jones Lang LaSalle IP, Inc. All rights reserved.
6. Total jobs vs. unemployment rate: St. Louis
Source: BLS, JLL Research
Industrial employment trends (12-month change) :St. Louis
Source: BLS, JLL Research
Job growth/loss by sector (12-month change): St. Louis
Source: BLS, JLL Research
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
1,220,000
1,270,000
1,320,000
1,370,000
1,420,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Total Employment
Unemployment
Office employment trends (12-month change) :St. Louis
Source: BLS, JLL Research
Job growth (12-month change): United States vs. St. Louis
Source: BLS, JLL Research
Employment Update
Metro St. Louis | September 2016
3.1%
5.0%U.S. unemployment
1.7%U.S. 12-month job growth
5.0%St. Louis unemployment
2.0%St. Louis 12-month job growth
5.2%Missouri unemployment
0.7%Missouri 12-month job growth
Peak: 1,439,149 jobs
(10)
(5)
0
5
10
15
20
2011 2012 2013 2014 2015 2016
Financial Activities
Professional and Business Services
Information
Government
(15)
(10)
(5)
0
5
10
15
2011 2012 2013 2014 2015 2016
Mining, Logging & Construction
Trade, Transportation & Utilities
Manufacturing
Other Services
-3,800
-1,000
200
500
1,600
2,200
3,400
4,300
7,100
11,700
Manufacturing
Information
Other Services
Government
Mining, Logging & Construction
Financial Activities
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Leisure & Hospitality
-1.0%
0.0%
1.0%
2.0%
3.0%
2011 2012 2013 2014 2015 2016
St. Louis United States