Corporate exits hurt downtown's office market

Nearly 164,000 square feet of Class A office space has been vacated in the city of St. Louis so far this year, mitigating growth made in the city’s office segment over the previous 12 months, according to market research from Colliers International.

The city’s negative absorption rate is by far the worst in the St. Louis region, which as a whole absorbed 37,115 square feet in the Class A market over the first nine months of the year.

The downward trend is due to three previously announced exits in the city: Peabody Energy giving back 60,000 square feet at Peabody Plaza, Hardee’s vacating 59,000 square feet at 100 N. Broadway after moving its headquarters to Nashville and Hudson's Bay leaving nearly 57,000 square feet at 500 N. Broadway.

Colliers Senior Vice President Tony Kennedy said it’s a blip on the radar for a market that is trending better than where it was several years ago.

The Central Business District’s vacancy rate over the last five years has improved from the 21.7 percent rate registered at the end of 2012 to 15.3 percent today. Rental rates have grown, too, though not at the same pace, from $15.76 per square foot in the fourth quarter of 2012 to $16.26 a square foot at the end of the third quarter.

Aside from the vacant former AT&T tower, Kennedy said “there really haven’t been many positive or negative changes in the downtown market.”

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