The St. Louis Industrial market finished the first half of hte year on a high note as the market absorbed over 1.5 million SF of space. Six 100,000+ SF transactions helped fuel the momentum, led by three user sales that accounted for nearly 900,000 SF.
Space options for 100,000+ SF tenants seeking modern distribution buildings with at least 28′ clear heights are becoming more extinct by the day. This shortage of inventory is most pronounced in the Northwest and St. Charles areas.
Speculative construction has begun on the Illinois side of the market as the 1.3 million SF Gateway Commerce Center project recently broke ground. On the Missouri side, Panattoni is expected to begin construction on their Aviator Distribution Center project in August and Duke’s Premier 370 project looks to be resolving their bond issues for a 2015 delivery.
Although activity remains healthy, market experts are estimating that the market will end the year with roughly 2.5 million SF of positive absorption.
While landlords continue to push asking rates int eh 100,000+ SF properties, rent concessions coupled with stabilized lease rates remain within the small product. Landlords are continuing to play it safe by minimizing their vacancy exposure by encouraging tenants to renew.