St Louis, Missouri
2nd Quarter 2014
OFFICE
Market Trends
COMMERCIAL REAL ESTATE INFORMATION 2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
Table of Contents/Methodology of Tracked Set
Table of Contents/Methodology of Tracked Set
2
St Louis Market Maps
3
Q2 2014 Overview
4
Overview by Submarket/ Property Type
5
Vacancy & Lease Rates
6-7
Biggest Absorption Changes
8
Available Space
9
Notable Transactions
10
Vacancy & Absorption
11-12
Xceligent St Louis Contact
13
The St Louis tracked set consists of an inventory of buildings considered to be competitive within the brokerage community. All buildings within the competitive tracked set have been reviewed and verified by members of the Advisory Boards for each market area. Inventory
The total square feet of all existing single and multi tenant office buildings greater than 15,000 SF, excluding owner occupied and medical buildings.
Total Available SF
All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move.
Total Vacant SF
The total of all of the vacant square footage within a building, including both direct and sublease space.
Direct Vacant SF
The total of the vacant square footage in a building that is being marketed by an agent representing the landlord.
Sublease SF
Space that is offered for lease by a current tenant, or his agent, within a property. Whether the tenant is paying rent or not, the space is considered vacant only if it is unoccupied.
Net Absorption
The net change in physically occupied space from quarter to quarter, expressed in square feet.
2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
2
St Louis Office Markets
2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
3
Q2 2014 Overview
Slow and steady positive movement is having significant impact.
Positive absorption in the past four quarters totals +818,635 square feet, an average of +204,659 square feet per quarter.
The total vacancy rate currently stands at 7.5 million square feet. This is a reduction of 9.8% in one calendar year.
With vacancy rates at 15.3% there is still product available to support continued growth. The gap between rental rates and replacement costs needs to be reduced prior to speculative construction.
500,000
17.5%
400,000
17.0% 16.5%
300,000
16.0% 200,000 15.5% 100,000
15.0%
0
14.5%
-100,000
14.0%
2013 Q2
2013 Q3
2013 Q4
2014 Q1
Vacancy Rate (%)
Net Absorption (SF)
Historical Vacancy & Net Absorption
2014 Q2
Q2 2014 Market Overview by Property Type
# of Bldgs
Inventory (SF)
Total Total Vacant Available (SF) (SF)
Total Direct Direct Vacant Vacancy Vacancy (SF) Rate (%) Rate (%)
Available Qtrly Net YTD Net Sublease Absorption Absorption (SF) (SF) (SF)
A
136
20,515,113
3,943,494
2,737,544
13.3%
2,670,144
13.0% 244,092
-79,223
12,451
B
359
22,577,279
4,784,809
3,920,152
17.4%
3,885,191
17.2%
94,703
175,254
118,288
C
88
5,428,051
841,571
787,709
14.5%
787,709
14.5%
0
57,791
47,979
Grand Total
583
48,520,443
9,569,874
7,445,405
15.3%
7,343,044
15.1% 338,795
153,822
178,718
2Q 2014 Market Trends © 2014 by Xceligent, Inc. All Rights Reserved
4
Overview by Submarket/ Building Class
# of Bldgs
Mid St Louis County
Inventory (SF)
Total Total Total Direct Available Vacancy Vacant (SF) Vacant (SF) (SF) Rate (%)
Direct Vacancy Rate (%)
Qtrly Net YTD Net Available Absorption Absorption Sublease (SF) (SF) (SF)
95
8,496,650
1,153,750
964,614
11.4%
935,445
11.0%
142,373
11,381
33,903
A
22
4,221,048
556,755
452,641
10.7%
430,537
10.2%
88,518
-35,106
-9,456
B
48
2,932,901
456,306
389,636
13.3%
382,571
13.0%
53,855
48,434
35,134
C
25
1,342,701
140,689
122,337
9.1%
122,337
9.1%
0
-1,947
8,225
90
7,332,097
1,685,782
1,176,006
16.0%
1,158,525
15.8%
17,481
122,279
91,360
A
19
2,839,298
633,487
266,606
9.4%
252,450
8.9%
14,156
18,406
13,422
B
51
3,409,417
768,062
656,271
19.2%
652,946
19.2%
3,325
14,873
-11,062
C
20
1,083,382
284,233
253,129
23.4%
253,129
23.4%
0
89,000
89,000
42
2,533,680
561,829
278,393
11.0%
278,393
11.0%
81,125
-22,009
-6,453
A
10
1,035,274
229,225
79,628
7.7%
79,628
7.7%
81,125
-14,012
-14,012
B
30
1,419,093
332,604
198,765
14.0%
198,765
14.0%
0
-7,997
7,559
C
2
79,313
0
0
0.0%
0
0.0%
0
0
0
Saint Louis City
145
16,073,150
3,640,372
3,037,837
18.9%
3,022,305
18.8%
28,800
36,870
46,644
A
18
5,768,067
1,416,385
1,198,144
20.8%
1,182,612
20.5%
28,800
-39,540
-17,656
B
103
8,024,263
1,880,362
1,496,068
18.6%
1,496,068
18.6%
0
107,797
92,475
C
24
2,280,820
343,625
343,625
15.1%
343,625
15.1%
0
-31,387
-28,175
42
2,366,074
374,227
347,180
14.7%
347,180
14.7%
0
-13,360
-13,339
A
9
712,138
136,470
140,873
19.8%
140,873
19.8%
0
-22,258
-21,448
B
24
1,332,111
213,258
185,648
13.9%
185,648
13.9%
0
-604
-1,583
C
9
321,825
24,499
20,659
6.4%
20,659
6.4%
0
9,502
9,692
169
11,718,792
2,153,914
1,641,375
14.0%
1,601,196
13.7%
69,016
18,661
26,603
A
58
5,939,288
971,172
599,652
10.1%
584,044
9.8%
31,493
13,287
61,601
B
103
5,459,494
1,134,217
993,764
18.2%
969,193
17.8%
37,523
12,751
-4,235
C
8
320,010
48,525
47,959
15.0%
47,959
15.0%
0
-7,377
-30,763
583
48,520,443
9,569,874
7,445,405
15.3%
7,343,044
15.1%
338,795
153,822
178,718
North St Louis County
Saint Charles County
South St Louis County
West St Louis County
Grand Total
2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
5
Vacancy & Lease Rates
Total Vacancy Rate % 2013 Q2 Mid St Louis County
2013 Q3
2013 Q4
Asking Wtd Direct Lease Rate (FSG)
2014 Q1
2014 Q2
2013 Q2
2013 Q3
2013 Q4
2014 Q1
2014 Q2
13.6%
12.4%
11.8%
11.5%
11.4%
$22.67
$23.01
$22.90
$22.66
$22.59
A
15.6%
13.6%
12.3%
11.2%
10.7%
$26.14
$26.31
$25.75
$25.72
$25.30
B
12.8%
11.9%
12.1%
12.8%
13.3%
$20.32
$20.58
$21.25
$21.18
$21.55
C
10.0%
10.4%
9.6%
9.0%
9.1%
$16.58
$16.70
$16.53
$16.50
$16.72
North St Louis County
20.1%
19.0%
17.3%
17.7%
16.0%
$18.31
$18.27
$18.03
$17.62
$18.99
A
10.0%
10.8%
10.3%
9.5%
9.4%
$20.62
$20.78
$21.02
$20.97
$20.97
B
25.5%
22.6%
18.2%
19.8%
19.2%
$17.43
$17.27
$17.05
$17.58
$18.01
C
30.2%
29.6%
31.0%
29.9%
23.4%
$16.87
$17.35
$16.44
$14.13
$17.02
11.2%
11.2%
10.7%
10.1%
11.0%
$14.56
$14.53
$14.51
$14.45
$14.08
A
6.5%
6.5%
6.5%
6.5%
7.7%
$19.15
$19.16
$19.15
$19.31
$18.78
B
15.2%
15.3%
14.5%
13.4%
14.0%
$13.17
$13.01
$12.97
$12.79
$12.76
C
0.0%
0.0%
0.0%
0.0%
0.0%
$0.00
$0.00
$0.00
$0.00
$0.00
19.6%
19.8%
19.6%
19.1%
18.9%
$16.13
$16.46
$16.22
$16.48
$17.13
A
20.1%
20.6%
19.6%
20.6%
20.8%
$18.57
$18.82
$18.80
$18.40
$18.87
B
20.7%
20.8%
21.0%
19.6%
18.6%
$14.96
$15.19
$15.24
$15.28
$16.15
C
14.2%
13.9%
14.2%
13.7%
15.1%
$13.22
$13.26
$13.27
$13.25
$13.14
South St Louis County
17.5%
15.6%
13.9%
14.1%
14.7%
$18.85
$19.80
$20.10
$19.89
$20.47
A
21.8%
18.1%
16.8%
16.7%
19.8%
$22.84
$22.71
$22.49
$22.35
$22.46
B
16.6%
15.6%
15.2%
15.7%
13.9%
$18.28
$18.14
$18.89
$18.79
$19.35
C
10.3%
9.4%
6.4%
6.3%
6.4%
$17.15
$17.39
$17.38
$17.38
$16.37
15.7%
15.0%
14.1%
13.9%
14.0%
$20.79
$20.59
$20.51
$20.38
$21.17
A
13.8%
13.2%
12.6%
10.3%
10.1%
$23.93
$23.81
$23.64
$23.71
$24.54
B
18.7%
17.8%
15.9%
15.4%
18.2%
$17.62
$17.76
$17.81
$17.81
$17.70
C
6.2%
6.8%
13.5%
19.9%
15.0%
$19.10
$17.41
$20.37
$19.70
$17.33
Grand Total
17.2%
16.6%
15.8%
15.6%
15.3%
$18.69
$18.87
$18.83
$18.70
$19.25
Saint Charles County
Saint Louis City
West St Louis County
Vacancy & Lease Rates continues to next page... 2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
6
Vacancy & Lease Rates [continued]
Asking Lease Rate Range by Class $35.00 $33.00 $30.00
Asking Lease Rate (FSG)
$28.00 $25.00
$25.00 $23.07
$20.00 $17.57 $15.00
$15.78
$15.00
$10.00
$10.50
$10.00
$5.00
$0.00 A
B
2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
C
7
Biggest Absorption Changes
Property Name
SF Occupied or Vacated
Company Name
Market
Building Class
West St Louis County
A
St Louis City
B
Westport
B
CityPlace 4
29,885 Climate Corp.
Millennium Center
23,625
12000 Building
16,562 YOH Services LLC
US Bank Plaza
14,302 MVP Law
St Louis City
B
Union Square Plaza
11,381 YMCA
St Louis City
B
West St Louis County
A
Mid St Louis County
A
St Charles County
A
Bel Aire V
Gore Perry Reporting & Video, Claim St Louis, Swan Corporation
8,127 Mississippi Sand
Old Town Executive Office
(11,565) NISA
5301 Veterans Memorial Pkwy
(11,805) Gallagher Bassett
Corporate Hill I
(12,679) Hesse Martone
West St Louis County
A
St Louis Place
(27,598) Fleishman-Hillard
St Louis City
A
2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
8
Available Space
Largest Blocks of Available Space 40
35
30
25
20
15
10
5
0
Mid St Louis County
West St Louis County
Saint Louis City
50-100K
South St Louis County
25-50K
Saint Charles County
North St Louis County
10-25K
2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
9
Notable Transactions
SF Leased
Sanford Brown Building
17,553
Union Square Plaza
11,381 YMCA
CityPlace 6
14,221 Stonegate Mortgage
West St Louis Creve Coeur County
A
CityPlace 4
13,585 Climate Corp
West St Louis Creve Coeur County
A
Maryland Place
16,600 Risk Consulting Partners
Mid St Louis County
Clayton
A
Gold Tower-Office Space
14,487 Metal Exchange
North St Louis County
Westport
B
Market
Submarket
Bldg Class
Property Name
SF Sold
Company Name
Lindenwood University (Expansion)
Company Name
143,649 Bamboo Woodcrest LLC Woodcrest Executive 36,895
Eagle Bank and Trust Company Of Mo
Submarket
Illinois North
Saint Louis City
Woodcrest Center,
4100 Lindell Blvd
Market
Bldg Class
Property Name
B
Midtown
West St Louis Creve Coeur County Saint Louis City
2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
Central West End
B
B
B
10
Vacancy & Absorption
Net Absorption by Class
Vacancy Rate by Class
200,000
20.0%
16.0%
14.5%
13.3%
12.0% 10.0% 8.0% 6.0%
4.0%
Net Absorption (SF)
Vacancy Rate (%)
18.0% 14.0%
175,254
17.4%
150,000 100,000 57,791
50,000 0 -50,000
2.0% 0.0%
A
B
C
A
16.5% 15.8%
16.0%
15.6% 15.3%
15.5% 15.0% 14.5%
14.0%
Net Absorption (SF)
Vacancy Rate (%)
420,560
16.6%
400,000
2013 Q3
2013 Q4
2014 Q1
277,006
300,000 200,000
153,822
100,000 15,096
0 -100,000
2013 Q2
C
500,000
17.2%
17.0%
B
Net Absorption by Quarter
Vacancy Rate by Quarter 17.5%
-79,223
-100,000
-34,883
2014 Q2
2013 Q2
2013 Q3
2013 Q4
2014 Q1
2014 Q2
Vacancy & Absorption continues to next page... 2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
11
Vacancy & Absorption [continued]
Vacancy Rate by Class 25.0%
Vacancy Rate (%)
20.8%
18.6%
20.0%
16.7% 15.1% 14.1%
15.0% 10.4% 10.0% 5.0% 0.0% A
B
St. Louis City
C
Suburban
Net Absorption (SF)
Net Absorption by Class 120,000 100,000 80,000 60,000 40,000 20,000 (20,000) (40,000) (60,000)
107,797
89,178 67,457
(39,540)
(31,387) (39,683) A
St. Louis City
B
C
Suburban
2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
12
Xceligent St Louis Contact This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy.
For additional information about this report or to discuss membership in Xceligent please contact
Bonnie Devine (314) 452-3059 bdevine@xceligent.com
Kevin Talbot (847) 910-7155 ktalbot@xceligent.com Steig Seaward
(303) 888-3177 sseaward@xceligent.com
COMMERCIAL REAL ESTATE INFORMATION 2Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
13