David Wirth and Kyle Pershing with the St. Louis office of DTZ, say that a dip in unemployment, more confident consumers and an influx of major retailers is making a difference in their city today.
The two CRE pros recently spoke with Midwest Real Estate News about their high hopes for the St. Louis commercial real estate market.
Midwest Real Estate News: Is commercial activity on the rise in St. Louis today?
Kyle Pershing: We have seen steady improvement in commercial activity during the past couple of years. The vacancy rates across all sectors have been declining. That is a trend that we see continuing here.
David Wirth: We are seeing more mom-and-pop operators getting back into our market. That is an indicator of confidence. The better jobs numbers we’ve been seeing is definitely having an impact on our market. We are seeing a steady decrease in unemployment. We are seeing job growth here. At the same time, the manufacturing business is doing well here. That is an important engine for the local economy.
MREN: What kind of properties are attracting the most interest from investors in today’s market?
Pershing: Class-A properties and locations have had the most interest. Certain markets have been stronger here, too. The Chesterfield market has been a strong one. Creve Coeur has been a strong market for us. The Clayton market continues to see a sizable amount of activity.
Wirth: Those markets are doing well because they have middle-class families living there who have disposable incomes. And those middle-class families are feeling better about the economy today.
MREN: What do you need to see happen in St. Louis for commercial real estate to see even more activity?
Pershing: We need better regional leadership. That came under the spotlight because of the violence in Ferguson. The national retailers that are not here and are not familiar with our market question St. Louis because of the negative stories they see in the news. But at the end of the day, this is a good place to do business. We are a stable market. The risk perceived in the market because of Ferguson isn’t necessarily real.
MREN: What has you excited about the St. Louis market?
Wirth: We are seeing a lot of conversions of old manufacturing spaces into loft apartments. That’s a positive trend. We need more apartment options in the St. Louis market. The multifamily market is a dynamic one here. And it is quickly changing. We are seeing a lot of young people moving into those buildings and areas right now.
If you look at the Midtown St. Louis area, you’ll see a lot of positive news. The addition of IKEA (which will open here in the fall) has generated a lot of positive buzz in this area. We are expecting developers to compete for properties here. We expect to see more development in Midtown and downtown in the next few years. We expect that the addition of retailers such as IKEA will only spur more activity in the region.