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St. Louis Office Insight
1. St. Louis dominates startup funding in Missouri
Source: JLL Research, PwC Moneytree
Class A asking rates
Source: JLL Research
Absorption concentrated in the suburbs
Source: JLL Research
New development is on the horizon
2,257
737,074
-38,153
-200,000 0 200,000 400,000 600,000 800,000
Suburbs
CBD
$135+ million
Startup funding by St. Louis companies
$26.23
$24.48
$23.10
$20.84 $20.32
$18.97
$15.00
$20.00
$25.00
$30.00
Clayton West
County
South
County
St. Charles
County
Northwest
County
CBD
Office Insight
St. Louis | Q4 2015
42,628,094
Total inventory (s.f.)
100,172
Q2 2015 net absorption (s.f.)
$19.72
Direct average asking rent
125,000
Total under construction (s.f.)
14.7%
Total vacancy
698,921
YTD net absorption (s.f.)
-1.9%
12-month rent growth
60.0%
Total preleased
Startup and tech employment is going strong
Over 1,000 new information technology jobs are coming to St. Louis. Boeing is
hiring 700 engineers, technicians and staff to build commercial airplanes and
military systems. KPMG already has 270 employees in downtown St. Louis and
is expanding IT by 175 new positions. Locker Dome is expanding its operations
and adding 300 new positions over the next several years after nearly tripling its
office space. Pandora will be Square’s new neighbor in Cortex; where Square is
hiring 200 to open its fourth U.S. office. Growth is expected to continue as local
startups secure more funding to expand business operations.
The construction drought is ending
After several years of occupancy growth, a new speculative office building is
finally under construction. Delmar Gardens III, in West County along I-64, will be
125,000 square feet and has Rabo Agrifinance as the lead tenant (75,000 square
feet). The new property is expected to be completed in the summer of 2017. A
Clayton office building was also announced. The 233,000-square-foot Apogee
office tower will be located along Forsyth Boulevard. The new office building
joins four others on the same block. Forsyth Boulevard is the most expense
street for office space in the region.
Suburban markets fuel growth
Suburban occupancy growth dropped vacancy in the five submarkets to 12.6
percent—a 230 basis point improvement from a year ago. The reduced vacancy
has led some landlords to begin increasing asking rates. In Clayton and West
County, several buildings increased asking rates by $0.50-$1.00. As tight
conditions in the suburbansubmarkets drive up rental rates; it only makes sense
for cost conscience tenants to begin looking downtown. With many large blocks
of space available, large occupiers have many options in the CBD.