Avison Young in St. Louis
The St Louis office opened in the summer of 2016 to increasing our strong presence in the U.S. Midwest and service new and existing clients in the St. Louis region with a wide range of commercial real estate services, including landlord advisory services, tenant representation, facilities management and property management. The St. Louis office also provides strategic advantages for our clients in other Midwest and U.S. markets while fostering multi-market and cross border transactions and business relationships.
St. Louis is the largest metropolitan area in the State. The MSA has 2.8 million people, ranking it as number 20 in the nation. Home to 19 Fortune 1000 companies, which include Express Scripts, Emerson and Centene, St. Louis is also headquarters for many large privately-held companies such as Enterprise Holdings, World Wide Technology and Edward Jones.
St. Louis is benefiting from a growing, diverse economy bolstered by strong healthcare, education, government, financial services, bio and life sciences and IT. Manufacturing, a past cornerstone, is seeing some resurgence with General Motors completing a major expansion of its Wentzville plant, adding 1,200 employees.
The Danforth Plant Science Center is an anchor and magnet for the bio and life sciences. Monsanto, Mallinckrodt and Pfizer, coupled with Washington University and St. Louis University, add to the attraction of St. Louis for those seeking employment and/or research in these necessary and growing industries.
The St. Louis metro area office market contains 131 million square feet (msf). There is a wide disparity in vacancy rates depending on the submarket, with Downtown having a vacancy of 14.7%, and Clayton, the County seat, a vacancy rate of only 4.4%. Little speculative construction is occurring but many companies, such as Centene and World Wide Technology, are building for their expanding workforce. The National Geospatial-Intelligence Agency is relocating to a new $1 billion campus north of downtown, which is expected to be completed by 2022. Nestle announced that it would be moving its IT operations from California to St. Louis, occupying an additional 60,000 sf downtown. Cortex Innovation Community, located between Clayton and downtown, continues to see new developments attracting millennials to the area.
The retail market with 157 msf is strengthening this cycle with net positive absorption, a vacancy rate declining to 5.5%, and increasing rental rates. Older retail developments are transitioning to meet the new economy. Northwest Plaza and Crestwood Mall are examples, with both being redeveloped into mixed-use facilities reorienting toward Work, Play, Live communities. Westport Plaza is receiving a boost from World Wide Technology completing its new headquarters, bringing 1,000 employees to this office, hotel, and entertainment complex. In Chesterfield, Dallas-based Topgolf is replacing a three-sheet ice complex on 22 acres with its high-end golf practice facility.
The Metro area has 260 msf of industrial space. True to its heritage as the Gateway to the West, St. Louis has all the transportation modes needed for today’s manufacturing, logistic and multimodal transportation companies, along with their service providers. All the transportation means converge in St. Louis: Rail, barge, truck, and air. In 2016 St. Louis Regional Freightways was created with a mission to accelerate growth in the region. Amazon now occupies over 1.9 msf on both sides of the river, adding 2,000 employees to date with more expected.
St Louis continues to record an increasing number of transactions and interest from out-of-state investors seeking a stable market with better returns than markets on the coasts. SARA Investment Real Estate entered the area in 2015 and continues to purchase well-positioned properties with a good tenant mix. Hudson Holdings entered the St. Louis market in 2016 with the purchase of the downtown 1.2 msf Railway Exchange office building. Blackstone continued its accumulation of properties by recently closing on four industrial properties comprising 1.2 msf for $59 million.