St. Louis Office Market Report
Leasing Activity Escalates in Western Submarkets;
Corporate Relocations Spark Investor Interest
Suburban submarkets benefiting from return to offices. St. Louis' economy has become more diverse in the last decade, and has seen office-using employment climb as a result. Leasing slowed significantly when remote work was in effect; however, a small portion of activity has finally returned. Accounting firm Armanino and software company Scale AI signed to fill more than a combined 100,000 square feet in western suburbs since last spring. The western and southern submarkets have seen the fastest demand recoveries, but these sizable office markets also recorded the largest vacancy increases during the pandemic. Heading into this year, vacancy rates are around 100 basis points higher in suburban St. Louis than they are in the CBD. An improving demand outlook for locations outside the core will support metrowide vacancy contraction that allows for rent gains, even as 1.1 million square feet of new supply enters the market. This is the largest annual delivery since 2009, with the majority of new space set to open in the cities of St. Louis and Clayton. Some built-to-suit space is slated for completion in St. Charles County.