St. Louis’ aging office stock and the coming prime office shortage.

Since the onset of COVID, developers have been increasingly wary of any new office construction due to the changing way in which employees work and the perceived appetite for office space across the metro. These concerns have proven to be unfounded in new prime assets which have leased space anywhere from $38-$50 SF. Due to the high demand of prime assets, there is now only one large block of space available in Clayton over 100,000 SF.

St. Louis is not unique among Midwest markets in that most of our office product continues to age. In fact, 73% of existing office supply in St. Louis was constructed before 1990’s. In the wake of the great recession, fewer office projects made it off the ground without some sort of incentive from local government. Now, as users seek out amenity rich prime space, out of only 53 MSF of Class A office product in St. Louis, 2.6 MSF of the product could be considered prime in nature. (Prime assets are in walkable urban areas with an abundance of amenities, access to food service, conference and meeting space as well as entertainment.). As a result, St. Louis may be poised to experience a shortage of prime space at the highest end of the office market.