Absorption Drives New Construction in St. Louis Industrial Market

Rezul News/10441173
2019 Q3 Colliers St. Louis Industrial Market Research & Forecast Report

ST. LOUIS - Rezul -- Heavy absorption and leasing activity are stimulating a continued construction boom in St. Louis, bringing even more new spec construction onto the market. Yearly absorption numbers have been positive since 2010 and the third quarter ended with historically low vacancy rates. Direct asking rental rates are approaching pre-recession levels, trending upward due to heavy absorption and leasing activity. There are reasons for caution, however, as pipeline activity appears to be slowing and average asking rental rates have decreased over the first three quarters of 2019.

Heavy industrial absorption continues with year-to-date overall absorption at nearly 3 million square feet (MSF) for the entire market. Much of this absorption can be linked to new construction projects that have been delivered fully or partially leased. This activity pushed overall vacancy to 6.04%, the lowest recorded vacancy rate since 2006. Performance varied between submarkets with some smaller submarkets reaching vacancy rates close to one percent. The Hanley/Brentwood submarket dropped to 0.98% while Jefferson County held steady at 1.16%. North County has the highest vacancy rate of any St. Louis submarket at 11.90%. This high rate is attributed to several large available spaces including 269,000 SF at NorthPark DC 1, 234,000 SF at Hazelwood TradePort III and 241,000 SF still available in 1609 Park 370 Place.

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Molly Mastin
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Source: Colliers International
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Filed Under: Real Estate

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