St. Louis Retail Investment Forecast
Growing Outer Suburbs Spark Investor Interest;
Lower-Risk Properties Take Forefront for Buyers
Single-tenant absorption drives metrowide vacancy plunge. The retail market in St. Louis has recovered significantly in the past year, with vacancy tightening nearly 100 basis points in 2021. While both the single and multi-tenant segments recorded vacancy rates near 6 percent at their pandemic-era peaks, single-tenant performance has solely aided the overall figure since. This has been driven by net absorption of more than 1.1 million square feet of single-tenant properties, dropping the segment's availability below 5 percent, while multi-tenant vacancy has remained roughly 100 basis points above the pre-pandemic rate. Mild improvements to demographic trends should further support performance, as the rate of net out-migration has slowed recently to an almost flat annual change. Additionally, household incomes are expected to grow at a rate of 3 percent this year, a tick faster than the national average. This, along with a development pipeline that is more than 90 percent pre-leased, will aid rents and slash vacancy in 2022.