St. Louis Real Estate Market Reports

St. Louis Office Market

The market softened with negative 134,891 SF of net absorption during the quarter, bringing the total to negative 226,504 SF over the past year. The market has now seen three consecutive quarters of negative absorption, as tenants continue to downsize their space in favor of higher-quality options. The non-owner-occupied construction pipeline has been inactive since the third quarter of 2022, with only 41,000 SF currently under construction. Vacancy increased by 20 basis points, reaching 14.6% for the quarter, and is projected to rise towards 15.0% as the market continues to adjust. Year-over-year rental rate growth has remained flat, with asking rents declining by 1.2%.

St. Louis Industrial Market

Net absorption in the third quarter of 2024 totaled 2.0 MSF, the highest amount since 2Q22. Vacancy decreased driven by positive net absorption in various mid-sized deals and no new deliveries to the market. The lower vacancy rate supports rental rate growth fundamentals and is likely to motivate developers to break ground in 2025. The 2.4-MSF construction pipeline has trended downward since its peak in 4Q21 but is expected to accelerate towards 3.0 million SF during the next four quarters. Vacancy remained decreased to 4.7% during the quarter and 10 basis points over the past four quarters as absorption outpaced deliveries. Asking rental rate growth for the overall market year-over-year has been nonexistent, totaling negative 3.1%.