After a solid 2016 that brought office vacancies in St. Louis to some of the lowest levels in more than 15 years, new construction, corporate downsizing and a big downtown vacancy could slow the momentum.
Right now, though, the fundamentals seem strong. Rents have consistently inched higher while the vacancy rate has declined for years. Commercial real estate firms project a continuation of St. Louis’s typical slow but steady job gains.
Commercial real estate firm Cushman and Wakefield said the region ended 2016 with an overall vacancy rate for high-end properties at 8.6 percent, the lowest since 2000. Commercial real estate firm CBRE put overall vacancy at 14.7 percent at the end of 2016, down from a high of 17.6 percent in 2011.
Downtown St. Louis is months away from a significant bump in its office vacancy rate, which at around 20 percent is already the highest in the metro area. The AT&T Center is scheduled to finish emptying out this fall, putting one of the largest office buildings in the region — and one that would require extensive renovations to accommodate more than a single tenant — on the market.
Scottrade’s sale to TD Ameritrade, expected to close by the end of the year, also means the likely downsizing of about 1,000 local staff and could put several large buildings on its Town and Country campus on the market. And there’s a chance Monsanto could offload some of its Creve Coeur buildings as corporate functions are consolidated with Bayer.
Read more: St. Louis Post-Dispatch