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Market Report

St. Louis Office Investment Forecast

2020 Outlook

Vacancy Holds Below Long-Term Average Amid Trio of Larger Deliveries; Deal Flow Strongest in Suburbs

Dual industries propel office demand. Employment growth in St. Louis is expected to remain consistent during 2020, differing the market from other Midwest metros that will experience a moderation in hiring velocity this year. The strength of St. Louis’ healthcare and tech sectors will support the steady pace of job creation, equating to a stable uptick in higher-paying jobs. Centene will lead the way, expanding staffs as it occupies most of a 660,000-square-foot development in Clayton. Mobile payment-processing company Square also plays a role, expanding its local workforce by up to 900 workers after relocating operations to the former St. Louis Post-Dispatch building. Medical and tech-related firms seeking newly built space proximate to downtown are likely to pursue floor plans at Armory District and City Foundry, two redevelopments of historical industrial sites. Leasing activity by firms within these sectors allows for a second consecutive year of positive absorption. Still, the metro’s vacancy rises moderately in 2020, holding in the 10 percent range, with availability in the Class B/C segment notably below this average.

 

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