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News release

ST. LOUIS, MO

Strong Sales Activity Helps Boost St. Louis Office Market

Jones Lang LaSalle Q4 2013 Office Statistics Also Show Lowest Vacancy Rate Since 2010


St. Louis, MO (Jan. 20, 2014) — Strong sales activity at the end of 2013—including Duke Realty’s sale of six buildings to Tryperion—helped boost the office market in St. Louis, according to Q4 statistics from Jones Lang LaSalle (NYSE:JLL). The purchase of the six single and multi-tenant office buildings, totaling 636,000 square feet, marks Tryperion’s first entry into the St. Louis office market.

The office market also saw improvement in the vacancy rate during the fourth quarter. The rate fell 80 basis points year-over-year to 17.1 percent, the lowest level since the end of 2010.  In West County, the vacancy rate fell 250 basis points from the end of 2012, to 14.4 percent. Net absorption for the year was 293,792 square feet, the most since 2008.

After bottoming out in 2008, leasing activity increased for the fourth consecutive year, moving 31.3 percent higher in 2013 than 2012. While previous quarters had a lot of tenant expansions, Q4 of 2013 had a lot of renewals and relocations that did not increase occupied space overall, however. Among the top leases were:
•    PNC renewed its 60,000-square-foot lease at 120 S. Central Ave. in Clayton.
•    Morgan Stanley completed a 30,000-square-foot lease, moving from 700 Corporate Park to 7733 Forsyth in Clayton. The space is in the top two floors of the building.
•    Anthem College renewed its 30,000-square-foot lease at 645 Gravois Bluffs Boulevard in South County.

In the suburbs, the flight to quality continues. Suburban Class A buildings outgained Class B buildings by 200,000 square feet in 2013. While large blocks of space are limited, 68.9 percent of tenants in the market are searching for less than 20,000 square feet. Thus, landlords with smaller vacancies in desirable areas should see reasonable activity.

Also, construction has begun on another Express Scripts office building at its corporate campus in Norwest County. The 220,000-square-foot building will be the company’s fifth building.

The Q4 statistics also forecast the following moving into the next few months:

  • Northwest County should have a strong start, with large leases by Equifax and Charter set to commence in Q1; both tenants will be moving into vacant buildings.
  • Financial and Business Services will lead the way in transactions over the next 18 months. The two industries represent 42.1 percent of the active tenants in the market.
  • Space is limited in the I-64corridor in West County, but RGA will be vacating 200,000 square feet in Timberlake II & III at the beginning of 2015, moving into its new corporate headquarters that is currently under construction.

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About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.3 billion of real estate assets under management. For further information, visit www.jll.com.