by Dan Rafter
The St. Louis industrial market absorbed more than 470,000 square feet in the first quarter of the year, according to the latest numbers from CBRE. This continues a trend that is taking place across the Midwest: Local industrial markets continue to thrive as consumers gain confidence in an improving national economy.
CBRE reported that during the first quarter, the St. Louis industrial market recorded a net absorption of 478,788 square feet. That’s a big improvement from the fourth quarter of last year, when the St. Louis industrial market absorbed 285,147 square feet.
The industrial vacancy rate, though, did increase 40 basis points in the first quarter here, jumping from a record-low of 5.7 percent in the fourth quarter of 2015 to a still-low 6.1 percent in the first quarter of this year. CBRE said that the addition of a significant amount of new industrial inventory is to blame for the small jump in vacancy rates.
Three St. Louis submarkets — Chesterfield Valley, Fenton and St. Charles County — remain near or below 2 percent vacancy, according to CBRE.
As in most Midwest cities, there are a host of reasons for St. Louis’ strong industrial showing, including improved employment numbers. CBRE said that in February of this year, total non-farm employment in the region reached 1.359 million. This is just above the previous peak of 1.358 million reported in February of 2008.
St. Louis also received the good news that the National Geospatial Agency will remain in St. Louis City, retaining 3,100 jobs. The agency will build a new $1.75 million development just northwest of downtown. Also, Reckitt Benckiser announced that it will build a 715,000-square-foot warehouse, adding 300 jobs in nearby St. Peters, Missouri.
Clayco Realty Group, too, is providing a boost to the St. Louis region, announcing that it will build a 538,383-square-foot speculative modern bulk warehouse. This project should be complete in the fourth quarter of 2016.
“Construction is keeping up with demand in St. Louis, which is impressive because the pick-up in new buildings has been substantial since the middle of last year,” said Jon Hinds, first vice president at CBRE, in a statement.