Office vacancy is at an eight year low the region absorbed more than 600,000 square feet of space for the second year in row. Find out more in Q4 Office Outlook.
2. Change in employment since 2010
Source: JLL Research, BLS
Leasing activity by submarket (> 10,000 square feet)
Source: JLL Research
Significant acquisitions of St. Louis companies
Source: JLL Research
Vacancy continues its descent
2,257
18%
15%
6%9%3%
48%
CBD
Clayton
Northwest County
South County
St Charles County
West County
Office Insight
St. Louis | Q4 2016
42,154,174
Total inventory (s.f.)
218,607
Q4 2016 net absorption (s.f.)
$19.05
Direct average asking rent
170,234
Total under construction (s.f.)
12.7%
Total vacancy
628,821
YTD net absorption (s.f.)
-3.4%
12-month rent growth
52.8%
Total preleased
Office employment surges ahead to new highs
The end of 2016 marked the first time in the history of St. Louis that office
employment exceeded 500,000 workers. Financial activities and professional
and business services (PBS) have led the way. Since 2010, PBS has doubled
the pace of St. Louis non-farm payroll growth, increasing 23.6 percent. Large
employers continue to add jobs; Boeing, Charter, and Centene announced or
signed lease expansions this quarter. Some smaller employers are trimming
staff. Lord and Taylor announced the closure of its Downtown St. Louis location;
the move will leave behind a vacant 60,000 square foot block next year at 500 N
Broadway. Bankrupt solar company, SunEdison, is planning further layoffs, its
entire 90,000 square foot space in Northwest County could be available early in
2017. SunEdison leased the space less than three years ago.
Leasing activity once again tops two million square feet
Nearly 64.0 percent of leasing activity in 2016 took place in West County and
Clayton, advancing the trend of tenants preferring the suburbs to the CBD. This
leasing activity has pushed absorption over 600,000 square feet for the second
consecutive year. Centene continues to be a driver of occupancy growth. The
Clayton-based company accounted for almost 10.0 percent of leasing activity in
2016 after four new leases in Clayton and West County. Looking forward, the
region has 1.3 million square feet of tenants in the market. Leasing activity is
expected to remain steady next year.
M&A brings jobs and office space into question
Several acquisitions of St. Louis companies bring the potential for future
occupancy loss. The three most notable were Scottrade, Isle of Capri, and
Monsanto. Scottrade owns and occupies almost 700,000 square feet of space in
West County. A lot of this space could be coming back to the market after its
acquisition by TD Ameritrade closes. Isle of Capri, also in West County, is set to
be purchased by Eldorado Resorts out of Nevada; the impact on the 100 St.
Louis employees in West County is still to be determined. The biggest
transaction was Bayer AG’s $66 billion purchase of Monsanto. With 4,000 local
employees, Monsanto has a significant real estate footprint across the region.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2010 2011 2012 2013 2014 2015 2016
Professional & business services
Financial activities
Company Acquirer Value
Monsanto Bayer AG $66 billion
Scottrade TD Ameritrade $4 billion
Isle of Capri Eldorado Resorts $1.7 billion
4. Office Leasing Activity Report
St. Louis
Q4 2016
This report analyzes all closed office leases > 10,000 s.f.
Leasing activity by size
750,061
17
2,218,116
71
672,648
77,413
-
Growing Shrinking Stable
364,741
0
113,831
0
256,432
15,057
Notable leasing transactions
Size Footprint Term (mos)
161,418 Shrinking -
91,994 Growing -
80,342 Growing -
63,000 Stable -
55,000 Shrinking -
47,233 Shrinking -
45,018 Growing -
31,562 Stable -
30,000 Stable -
24,528 Stable -
Leasing activity by submarketLeasing activity by industry
Total Class A s.f. leased
Expansion in market
Expansion in building
Renewal
Extension (< 36-month term)
Relocation within market
New to market
Average term (mos)
Total Class B s.f. leased
Direct
7930 Clayton Rd Clayton
At a glance
Total s.f. leased QTD
Total transactions QTD
Total s.f. leased YTD
Tenant footprint
7 4 5
Total transactions YTD
Leasing activity by transaction type
Type
701 Market CBD DirectPeabody Energy
Tenant Address Submarket
Direct
77 Westport Plaza Dr West County Direct
1 Progress Point Ct St Charles County
575 Maryville Centre Dr West CountyCushman & Wakefield
Centene
Aclara
Allianz Insurance
Direct
Centene 7733 Forsyth Blvd Clayton Direct
Direct
AMN/Linde Healthcare 3668 S. Geyer Rd. South County Direct
New Horizon Society 555 Washington Ave CBD Direct
PGAV 200 N Broadway CBD Direct
Ace Insurance Company 1 Progress Point Ct St Charles County
1 2 2 3 8
-
50,000
100,000
150,000
200,000
100,000+ 75,000-99,999 50,000-74,999 30,000-49,999 20,000-29,999
Total leased Number of leases
17.65%
11.76%
5.88%
5.88%
11.76%
47.06%
CBD Clayton
Northwest County South County
St Charles County West County
7.69%
30.77%
7.69%
15.38%
7.69%
7.69%
15.38%
7.69%
Real estate
Insurance
Marketing advertising communications PR
Technology
Architecture
Engineering
Other
300,000
400,000
500,000
600,000
700,000
800,000
Q1 2016 Q2 2016 Q3 2016 Q4 2016
Historical leasing activity
Source: JLL Research 2015 Jones Lang LaSalle IP, Inc. All rights reserved.
5. Office Statistics
St. Louis | Q4 2016
Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption (%
of stock)
Direct vacancy
(%)
Total vacancy
(%)
Average
asking rent ($
p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Downtown Totals 10,357,224 26,510 184,025 1.8% 19.3% 19.6% $16.98 0 0
CBD Totals 10,357,224 26,510 184,025 1.8% 19.3% 19.6% $16.98 0 0
Clayton Totals 7,509,865 41,527 117,991 1.6% 6.4% 6.7% $24.21 0 0
Northwest County Totals 3,708,693 -7,751 -8,011 -0.2% 19.7% 20.7% $16.36 0 0
St. Charles County Totals 2,316,429 17,599 35,565 1.5% 15.1% 16.0% $18.25 0 0
South County Totals 2,763,102 39,394 63,214 2.3% 4.7% 4.9% $19.29 0 0
West County Totals 15,413,291 101,328 236,037 1.5% 9.7% 9.9% $21.12 0 0
Suburban Totals 31,711,380 192,097 444,796 1.4% 10.0% 10.4% $20.23 0 170,234
St. Louis Totals 42,068,604 218,607 628,821 1.5% 12.3% 12.7% $19.05 0 170,234
Downtown A 6,352,496 16,209 153,738 2.4% 15.8% 16.4% $19.58 0 0
CBD A 6,352,496 16,209 153,738 2.4% 15.8% 16.4% $19.58 0 0
Clayton A 5,166,182 32,603 72,698 1.4% 6.3% 6.7% $26.99 0 0
Northwest County A 1,699,549 524 -15,975 -0.9% 9.3% 11.5% $19.69 0 0
St. Charles County A 847,728 16,719 2,628 0.3% 12.5% 15.2% $21.10 0 0
South County A 691,964 49,899 56,158 8.1% 2.2% 3.0% $22.77 0 0
West County A 7,775,019 39,129 -10,363 -0.1% 8.4% 8.9% $24.49 0 170,234
Suburban A 16,180,442 138,874 105,146 0.6% 7.8% 8.6% $24.14 0 170,234
St. Louis A 22,532,938 155,083 258,884 1.1% 10.0% 10.8% $22.22 0 170,234
Downtown B 4,004,728 10,301 30,287 0.8% 24.7% 24.7% $14.46 0 0
CBD B 4,004,728 10,301 30,287 0.8% 24.7% 24.7% $14.46 0 0
Clayton B 2,343,683 8,924 45,293 1.9% 6.6% 6.6% $19.69 0 0
Northwest County B 2,009,144 -8,275 7,964 0.4% 28.4% 28.5% $15.41 0 0
St. Charles County B 1,468,701 880 32,937 2.2% 16.5% 16.5% $16.26 0 0
South County B 2,071,138 -10,505 7,056 0.3% 5.5% 5.5% $18.74 0 0
West County B 7,638,272 62,199 246,400 3.2% 11.0% 11.0% $18.72 0 0
Suburban B 15,530,938 53,223 339,650 2.2% 12.4% 12.4% $17.75 0 0
St. Louis B 19,535,666 63,524 369,937 1.9% 14.9% 14.9% $16.69 0 0
211 North Broadway Suite 2075 St. Louis MO 63102 tel +1 314 261 7377 fax +1 314 338 2081 blaise.tomazic@am.jll.com
2016 Jones Lang LaSalle IP, Inc. All rights reserved.
Blaise Tomazic Research Manager
6. Total jobs (1,000s) 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
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 | December 2016
4.6%U.S. unemployment
1.6%U.S. 12-month job growth
4.3%St. Louis unemployment
2.4%St. Louis 12-month job growth
5.1%Missouri unemployment
1.8%Missouri 12-month job growth
0%
2%
4%
6%
8%
10%
12%
1,220
1,270
1,320
1,370
1,420
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Thousands
Total Employment
Unemployment
(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
-1.0%
0.0%
1.0%
2.0%
3.0%
2011 2012 2013 2014 2015 2016
St. Louis U.S.
(2,100)
(700)
400
1,000
2,000
3,000
4,100
4,500
8,100
12,400
Manufacturing
Information
Other Services
Government
Financial Activities
Mining, Logging & Construction
Trade, Transportation & Utilities
Educational & Health Services
Professional & Business Services
Leisure & Hospitality