Cassidy Turley, a leading commercial real estate provider in the U.S., announced today that the St. Louis industrial real estate market is building upon the positive momentum of 2013, while the office sector continues to be on the mend.
“If you followed the media hype during the first quarter of 2014, you probably think that the economy took a step backward,” said Dean Mueller, Managing Principal for Cassidy Turley in St. Louis. “The truth is that bad weather wreaked havoc on the way economic metrics are measured and reported, not on the economy itself.”
Q1 2014 Highlights by Industry Sector
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- Quick Summary: Much of the activity contributing to occupancy losses was expected. The first quarter is historically the slowest in terms of absorption growth in St. Louis, and the unusually severe winter weather likely played a role in delaying some of the planned occupancy in the area.
- Growth Areas: South County was the best performing submarket, netting 23,271 square feet of positive absorption, which brought the vacancy rate down 90 basis points from 13.2% to 12.3%.
- Vacancy Rates: First quarter net absorption totaled negative 91,631 square feet, which bumped the vacancy rate up 20 basis points to 15.0%.
- Outlook: Office market fundamentals will remain healthy and continue to tighten. Although vacant space is becoming harder to find, further improvements are still needed to justify any new speculative construction.
- Quick Summary: The industrial market was further strengthened with an incredible 1.8 million square feet of positive absorption. This single-quarter total is higher than the total net absorption seen in all of 2013 and the highest since 2005.
- Growth Areas: Deals that contributed the most to the absorption figure occurred in North and South counties and Metro East – areas that have been under the industrial real estate microscope for some time.
- Vacancy Rates: The overall vacancy rate fell by 80 basis points to 7.2%, marking a return to levels not seen since before the recession began to grip the market.
- Outlook: Tightening market conditions are leaving tenants with fewer options and presenting developers with increasingly appealing opportunities. Sheer lack of supply will drive up rents and lead to more speculative construction announcements.
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider with more than 4,000 professionals in more than 60 offices nationwide. With headquarters in Washington, DC, the company represents a wide range of clients—from small businesses to Fortune 500 companies, from local non-profits to major institutions. The firm completed transactions valued at $25.8 billion in 2013, manages approximately 400 million square feet on behalf of institutional, corporate and private clients and supports more than 24,000 domestic corporate services locations. Cassidy Turley serves owners, investors and tenants with a full spectrum of integrated commercial real estate services—including capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. Cassidy Turley enhances its global service delivery outside North America through a partnership with GVA, giving clients access to commercial real estate professionals in 65 international markets. Please visit www.cassidyturley.com for more information.