Scroll Down

Market Report

St. Louis Industrial Market Report

Second Half 2019

Western Metro Growing as a Distribution Hub; Investors See Value-Add Opportunity in Downtown Assets

Speculative projects in west St. Louis exacerbate vacancy, demand remains robust metrowide. Access to multiple interstates attracts logistic services and strong fundamentals bolster the industrial market in St. Louis. Over the past few years, developers haven’t responded to increasing space demand by overbuilding, which allowed vacancy to contract 350 basis points from 2013 through 2018. In 2019, vacancy expanded for the first time since 2011, due to a rise in speculative construction. Developers were particularly active in Hazelwood, anticipating the potential privatization of St. Louis Lambert International Airport and the positive impact it would have on air freight. Outside of this locale, the majority of deliveries were in Chesterfield and Saint Charles. Development in these three cities has brought roughly 2.5 million square feet to the market in 2019 between six projects. Currently, four additional projects creating 1.0 million square feet are underway in Hazelwood, three of which are not pre-leased. Although vacancy will swell in 2019 due to these large incoming speculative additions, demand in St. Louis remains robust. Since 2012, absorption has outpaced construction each year. In the first half of 2019, multiple fortune 500 companies moved into new facilities within the metro. Nike moved into a 247,000-square-foot building in Wentzville this past January, and Amazon moved into a 855,000-square-foot property in St. Charles this past May.


Related Research

Back to top