St. Louis Office Figures Q3 2023

-The average direct asking rate posted a modest decline of $0.02 over the second quarter.

-Vacancy jumped by 90 bps in the St. Louis region this quarter. Vacancy will likely continue to increase and converge with the availability rate of 23.8% as subleases become direct vacant space and users vacate commodity quality space at the end of their current term.

-Direct Availability reached a record high of 10.4 MSF this quarter (23.8%). The majority of which is concentrated in the West County (3.6 MSF) and Downtown (3.1 MSF) submarkets.

-Sublease availability contracted again for the second quarter in a row. The contraction can be attributed to sublease listings expiring and becoming direct space combined with users opting not to list space for sublease due to a low take rate.

-The most notable deals this quarter included SSM executing a sublease for the entirety of Corporate Hill IV (181,631 SF) and Clayco’s purchase of 8640 Evans Dr (227,467 SF). Other notable deals include American Multi-Specialty Groups renewal at 12655 Olive Blvd (25,514 SF) and ShaRXrelocation to 634-645 Maryville Center (23,030).

-Capital markets activity continues to remain in a trough. Although the Federal Reserve opted to pause rate hikes during the September FOMC meeting, buyers and sellers are still far apart.