St. Louis commercial real estate market experiences positive conditions

St. Louis' commercial market improved last quarter.

The commercial real estate market in the St. Louis region had an improved third quarter, which may make property management companies more optimistic about recovery, according to an analysis.

Rental rates for commercial real estate space in the city reached $17.40 per square foot last quarter, which could be the bottom. Additionally, the Colliers International report showed that vacancy rate for space in the St. Louis region declined to 13.2 percent, slightly lower than the 13.8 percent during the previous three months.

Overall, total occupied space rose by nearly 460,000 square feet through the first three quarters of this year, the St. Louis Post-Dispatch reported, citing the report from Colliers. When focusing on the downtown section of the city, the vacancy rate fell to 13.5 percent. This was far lower than the first quarter, where the level was nearly 17 percent. Much of this area is made up of office properties. Additionally, the most valuable space in the city had a rate of 11.5 percent, which was 2 percentage points lower than the same figure one year earlier.

County areas experience mixed market
The greater St. Louis area also posted improved levels of vacancy and pricing during the third quarter, the report explained. Clayton had the most expensive office market in the region. Even though the area had a slight increase in vacancy and drop in price, it was still far better than the rest of the region. Last quarter, the rental rate was nearly $20.70 per square foot, while the vacancy rate is near 10 percent.

While Clayton remained strong, there were other parts of the greater St. Louis market that did not fare as well. The report noted Chesterfield had a net decline of 40,000 square feet, while Olivette and other sections of the mid-county area had a drop of more than 20,000 square feet.

The wider American office market experienced further vacancy declines during the third quarter, according to a report from Reis. Last quarter, 17.1 percent of total office space remained vacant, which was slightly lower than the previous quarter's level of 17.2 percent. The figure was also down from the third quarter of 2011, when it was 17.4 percent.

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