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Market Report

St. Louis Office Market Report

2024 Investment Forecast

Tight Class B/C Vacancy Persists,
Reduced Construction May Backstop High-End Segment

Comparatively affordable submarkets prove durable. St. Louis entered 2024 as one of just five major markets nationally with sub-9 percent Class B/C vacancy. Making this possible, several of the metro’s largest submarkets by inventory have rates under that benchmark including the Illinois area, the city of St. Louis, North St. Louis County and St. Charles County. Three of those four locations, with the latter being the exception, have an average Class B/C asking rent that trails the marketwide segment mean. This dynamic serves as a microcosm of St. Louis’ office sector. The metro’s relative affordability has long been a major driver for space demand. More recently, that has manifested on a smaller scale, with lower-cost office segments and submarkets outperforming locally. Conversely, the Class A sector is facing distinct headwinds with vacancy rising by over 700 basis points since 2019, compared to a Class B/C adjustment that was less than one-fourth that margin. The 2024 construction pipeline marks an 11-year low, however, which should provide supply-side relief. Downsizing and consolidation upon the expiration of pre-pandemic leases will nevertheless lift overall vacancy and compress asking rents this year.

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