by Dan Rafter
The retail market has been slowly, but steadily, improving in the St. Louis area. An example of that came earlier this month, when Mid-America Real Estate Corporation’s investment sales team closed a $10 million retail sale in the city.
Mid-America brokered the sale of the Chippewa Center in St. Louis on behalf of its seller, St. Louis-based Pace Properties, Inc. Jared Commercial, based in Springfield, Illinois, purchased the 147,920-square-foot center for $10.6 million.
The center is located in the highly-populated Shrewsbury neighborhood of St. Louis, a strong retail market. Tenants in the center include Shop ‘n Save, Value City Furniture and Dollar Tree. That dollar store is especially attractive, as dollar stores continue to thrive even as the nation’s economy improves.
Ben Wineman of Mid-America Real Estate, Inc., working with Scott Seyfried of Pace Properties, Inc., were the brokers in this transaction.
Of course, this transaction is far from the only large retail deal completed in the St. Louis market recently. Colliers International’s second-quarter St. Louis retail report highlights a market that, while still facing challenges, is definitely on the upswing.
According to Colliers, year-to-date absorption in the St. Louis retail market stood at 293,561 square feet at the end of the second quarter. This was largely thanks to activity by big-box retailers such as Walmart, Stein Mart and Bob’s Discount Furniture.
The vacancy rate in the market is also on the way down. Colliers reported that St. Louis’ retail vacancy rate stood at 6.6 percent at the end of the second quarter of this year compared to 7.3 percent at the end of the same quarter last year. Average rental rates have increased sligtly, too, to $12.17 a square foot at the end of the second quarter. At the end of the same quarter in 2015, this figure was $12 a square foot.
New retail construction in the area looks to be modest, with 435,922 square feet expected to be delivered to the marekt in 2016. About 364,000 square feet of these new deliveries will be single-tenant properties.