In a year with over 617,000 square feet of positive absorption, most submarkets ended 2017 at historically low vacancy levels. Overall, St. Louis ended 2017 with a direct office vacancy rate of 11.5%. For comparison, year-end vacancy was 14.2% at the end of 2015 and 12.1% at the end of 2016.
Clayton, arguably the most desired submarket, ended the year with a direct vacancy rate of 6.2%. Even more impressive, Class A space in Clayton reached its lowest levels in five years, landing at 4.25%.
Numerous other submarkets also ended 2017 with Class A vacancy rates at their lowest point in the last five years. Westport, Olive/I-270, Manchester/I-270, I-44/I-270, and Earth City all finished strong in 2017.
Low vacancy rates, coupled with the demand for high quality space, jump-started new office development in St. Louis.
In 2017, St. Louis County added four notable buildings to the market. World Wide Technology completed its new, single-tenant project in Westport. Bunge North America finished their new building in Chesterfield. Lastly, two multi-tenant developments came online – Sunset Ridge in Des Peres and Delmar Gardens III in Chesterfield.
Combined, these four buildings delivered approximately 530,000 square feet of Class A space. Of that, only 48,000 square feet remains available today, with the largest contiguous block at 19,885 square feet.
St. Louis City ended 2017 with a direct vacancy rate of 20.2% for all classes of office space, and 15.6% for Class A. Two new, exciting spec developments, Ballpark Village Phase 2 and 4220 Duncan will add 380,000 square feet. Much of this space is preleased to noteworthy tenants such as PwC and Microsoft.
One big question facing St. Louis City’s CBD is the now empty 1.4 million square feet at the former AT&T office tower. The City rates above do not include this building which is currently on the auction block.