Developers’ plans to build huge warehouses before securing tenants is a clear sign the St. Louis industrial real estate market is recovering.
“Last year was good and 2014 looks fantastic,” said Patrick Reilly, a senior director and principal at Gateway Commercial, in Clayton.
Demand for warehouse and industrial space flagged during the recession. Almost no such space has been built in the St. Louis area since 2008. Lease rates are edging up even as additional space is brought to market. Since hitting bottom in 2010, the area’s industrial market has had six consecutive quarters of growth, said Matthew Eastin, an associate at Cassidy Turley, in Clayton. Nearly 14 percent of the area’s industrial space was empty at the end of 2010. Three years later, the vacancy rate was 8 percent.
EarthCity-based TriStar Properties hopes to complete financing and break ground this spring on a 540,000-square-foot modern bulk warehouse — the category of industrial space with high ceilings, widely spaced columns and plentiful loading docks sought by national distribution firms. Bulk warehouses total about 30 million square feet of space within St. Louis’ approximately 230 million-square-foot industrial real estate market. TriStar’s president said the growing popularity of e-commerce increases the need for bulk space.