St Louis, Missouri 3rd Quarter 2014
OFFICE
Market Trends
COMMERCIAL REAL ESTATE INFORMATION 3Q 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
Q3 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.
3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
2
St Louis Office Markets
3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
3
Q3 2014 Overview
With overall office vacancy rates at 15.4%, product is available to support continued growth for the foreseeable future.
Large blocks of space are anticipated to be taken down throughout the 4th quarter and into the new year.
The supply of sublease space continues to remain a non factor, accounting for less than 1% of the total market.
Class B space continues to struggle to attract new tenants as there is a general move up to higher Class A product that offers better parking and more amenities for the office user.
450,000
18.0%
400,000
17.0%
350,000
16.0%
300,000
15.0%
250,000
14.0%
200,000
13.0%
150,000 100,000
12.0%
50,000
11.0%
0
10.0%
2013 Q3
2013 Q4
2014 Q1
2014 Q2
Vacancy Rate (%)
Net Absorption (SF)
Historical Vacancy & Net Absorption
2014 Q3
Q3 2014 Market Overview by Property Type # of Bldgs
Inventory (SF)
Total Available (SF)
Total Vacant (SF)
Total Direct Vacant Vacancy (SF) Rate (%)
Direct Vacancy Rate (%)
Available Sublease (SF)
Qtrly Net YTD Net Absorption Absorption (SF) (SF)
A
138 20,805,725 4,207,186 2,706,277 13.0% 2,635,823
12.7% 233,064
96,993
159,090
B
345 21,483,752 4,181,636 3,755,247 17.5% 3,705,792
17.2% 96,245 -40,132
148,475
C Grand Total
88
5,426,014
997,829
892,792 16.5%
892,792
16.5%
0
-1,176
-8,057
571 47,715,491 9,386,651 7,354,316 15.4% 7,234,407 15.2% 329,309
55,685
299,508
3Q 2014 Market Trends © 2014 by Xceligent, Inc. All Rights Reserved
4
Overview by Submarket/ Building Class
# of Inventory (SF) Bldgs
Saint Louis City
130 15,075,721
Total Available (SF)
Total Vacant (SF)
Total Vacancy Rate (%)
Direct Vacant (SF)
Direct Vacancy Rate (%)
Available Sublease (SF)
Qtrly Net Absorption (SF)
YTD Net Absorption (SF)
3,219,763 2,829,440
18.8% 2,813,908 18.7%
28,800
100,226
299,919
A
18
5,768,067
1,423,229 1,126,984
19.5% 1,111,452 19.3%
28,800
81,616
83,723
B
88
7,026,834
1,424,323 1,337,568
19.0% 1,337,568 19.0%
0
15,803
219,854
C
24
2,280,820
372,211
364,888
16.0%
364,888 16.0%
0
2,807
-3,658
95
8,514,662
1,149,145
938,175
11.0%
911,018 10.7% 119,215
33,195
70,339
A
23
4,418,359
665,905
526,878
11.9%
501,320 11.3%
70,826
14,195
1,643
B
47
2,753,602
354,134
299,774
10.9%
298,175 10.8%
48,389
12,729
51,232
C
25
1,342,701
129,106
111,523
8.3%
8.3%
0
6,271
17,464
90
7,329,207
17.8% 1,284,189 17.5%
33,000
-36,126
-40,420
A
19
2,839,298
844,264
282,219
9.9%
9.4%
24,802
-15,613
-2,191
B
51
3,408,564
767,311
682,262
20.0%
674,064 19.8%
8,198
-14,979
-40,195
C
20
1,081,345
384,316
342,062
31.6%
342,062 31.6%
0
-5,534
1,966
42
2,366,074
388,971
318,880
13.5%
318,880 13.5%
0
15,007
11,979
A
9
712,138
123,055
123,055
17.3%
123,055 17.3%
0
16,702
-3,630
B
24
1,332,111
206,789
174,009
13.1%
174,009 13.1%
0
-538
7,074
C
9
321,825
59,127
21,816
6.8%
6.8%
0
-1,157
8,535
13.5% 1,533,058 13.1%
67,169
26,833
47,594
9.2%
27,511
-2,610
90,854
Mid St Louis County
North St Louis County
South St Louis County
West St Louis 170 11,740,846 County
1,995,891 1,306,543
1,976,091 1,587,924
111,523
268,063
21,816
A
58
5,939,288
912,700
558,705
9.4%
B
104
5,481,548
1,010,322
976,716
17.8%
937,058 17.1%
39,658
33,006
-10,896
C
8
320,010
53,069
52,503
16.4%
52,503 16.4%
0
-3,563
-32,364
44
2,688,981
656,790
373,354
13.9%
373,354 13.9%
81,125
-83,450
-89,903
A
11
1,128,575
238,033
88,436
7.8%
7.8%
81,125
2,703
-11,309
B
31
1,481,093
418,757
284,918
19.2%
284,918 19.2%
0
-86,153
-78,594
C
2
79,313
0
0
0.0%
0
0
0
0
9,386,651 7,354,316 15.4% 7,234,407 15.2% 329,309
55,685
299,508
Saint Charles County
Grand Total
571 47,715,491
543,497
88,436
0.0%
3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
5
Vacancy & Lease Rates
Direct Vacancy Rate %
Asking Direct Lease Rate (FSG)
2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3
2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3
Saint Louis City
20.5%
20.3%
19.1%
18.8%
18.7%
$14.70
$14.55
$15.06
$15.23
$14.98
A
21.2%
20.2%
19.8%
20.1%
19.3%
$19.17
$17.08
$19.17
$19.64
$19.64
B
21.4%
21.6%
19.6%
18.7%
19.0%
$14.17
$14.13
$14.32
$14.43
$14.24
C
15.9%
16.4%
15.7%
16.1%
16.0%
$11.49
$13.14
$13.14
$13.05
$12.68
Mid St Louis County
12.2%
11.5%
11.2%
11.1%
10.7%
$21.97
$21.87
$21.63
$21.55
$21.73
A
11.0%
9.9%
9.3%
10.2%
11.3%
$26.75
$26.68
$26.68
$26.60
$26.99
B
15.0%
14.7%
15.0%
13.4%
10.8%
$20.60
$20.52
$20.51
$20.39
$20.22
C
9.9%
9.6%
8.6%
8.8%
8.3%
$17.41
$17.24
$17.15
$17.24
$17.15
North St Louis County
19.2%
17.3%
17.7%
17.1%
17.5%
$17.32
$17.34
$17.26
$17.06
$17.36
A
10.4%
9.4%
9.5%
8.9%
9.4%
$20.50
$20.44
$20.33
$19.93
$20.18
B
22.7%
19.5%
19.9%
19.5%
19.8%
$17.31
$17.15
$17.30
$17.35
$17.31
C
31.3%
31.8%
31.8%
31.1%
31.6%
$13.74
$14.72
$13.77
$13.05
$13.77
West St Louis County
14.0%
13.6%
13.4%
13.4%
13.1%
$19.83
$19.87
$20.00
$19.82
$20.16
A
11.3%
10.7%
9.7%
9.1%
9.2%
$23.54
$23.47
$23.44
$23.54
$23.57
B
17.4%
17.3%
17.3%
18.0%
17.1%
$17.38
$17.47
$17.87
$17.50
$18.03
C
6.3%
6.3%
13.0%
15.3%
16.4%
$17.38
$17.13
$17.50
$17.60
$17.60
South St Louis County
15.5%
13.8%
13.8%
14.1%
13.5%
$19.05
$18.58
$19.24
$18.59
$19.34
A
20.5%
16.8%
16.7%
19.6%
17.3%
$22.99
$22.83
$22.83
$22.70
$22.87
B
14.3%
13.2%
13.4%
13.0%
13.1%
$18.33
$17.36
$18.44
$17.51
$18.60
C
9.4%
9.4%
9.4%
6.4%
6.8%
$16.58
$16.58
$16.58
$16.50
$16.50
10.9%
10.5%
9.9%
10.7%
13.9%
$16.35
$16.21
$15.42
$14.61
$16.55
A
6.5%
6.3%
6.3%
7.7%
7.8%
$19.67
$19.67
$19.78
$15.18
$20.70
B
14.6%
13.9%
12.9%
13.4%
19.2%
$15.16
$14.98
$13.87
$14.40
$14.32
C
0.0%
0.0%
0.0%
0.0%
0.0%
16.5%
15.8%
15.3%
15.2%
15.2%
$18.61
$18.52
$18.63
$18.48
$18.78
Saint Charles County
Grand Total
3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
6
Vacancy & Lease Rates [continued]
Asking Lease Rate Range by Class (FSG) $35.00 $32.00 $30.00 $28.00
Asking Lease Rate (FSG)
$25.00 $23.03
$22.00
$20.00 $17.21
$16.00
$15.00
$15.32
$10.00 $6.50
$6.50
$5.00
$0.00 A
B
3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
C
7
Biggest Absorption Changes
SF Occupied or Vacated
Company Name
Market
Building Class
45,165
Ameren Schlichter, Bogard and Denton Polsinelli
St Louis City
A
NewGround Building
31,333
Hochschild, Bloom and Company, LLC TCF Equipment Finance Live to Retire LLC Aerial Bouquets Crossroads Hospice of St Louis
West St Louis County
B
Creve Coeur Corporate
20,900
CMS Inteliteach
West St Louis County
A
CityPlace 6
16,721
Stonegate Mortgage Envision LLC (expansion)
West St Louis County
A
The Sumit at Creve Couer
14,000
The Louis Clinical Trials
West St Louis County
A
Clarkson Executive Center
(9,000)
TCF
West St Louis County
B
Forty Pointe
(12,952)
Suburban Journals
West St Louis County
B
1850 Borman Ct
(20,695)
CMS Intelliteach
North St Louis County
B
7574-7888 Veterans Memorial Pkwy
(36,000)
Sanford-Brown College
St Charles County
B
4178 N Service Rd
(62,000)
US Army Reserve
St Charles County
B
Property Name
Deloitte Building
3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
8
Available Space
Largest Blocks of Available Space 18 16 14 12 10
8 6 4 2 0 Saint Louis City
Mid St Louis County
North St Louis County
100K+
South St Louis County
50-100K
West St Louis County
Saint Charles County
25-50K
Historical blocks of space Quarter
100K+
50-100K
25-50K
2013 Q3
11
27
46
2013 Q4
13
31
39
2014 Q1
14
26
64
2014 Q2
15
25
49
2014 Q3
15
18
55
3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
9
Notable Transactions
Top Transactions Property Name
SF Leased or Sold
Company Name
Market
Laclede Gas Building
442,515
Brian Hayden
Saint Louis City
B
Sale
1900-1902 Pine St
73,119
Station Plaza Limited Partnership
St Louis City
B
Sale
Woodsmill Commons II
70,936
Centene Corporation
West St Louis County
B
Lease
500 N Broadway
60,000
Federal Reserve
St Louis City
A
Lease
Equitable Building
39,278
HOK
St Louis City
A
Lease
Riverport Tower
30,142
Sun Edison
Riverport
A
Lease
Rider Trail
29,160
IDX Corp
North St Louis County
B
Lease
Riverport Tower
27,723
Boeing
North St Louis County
A
Lease
600 Washington
18,000
Lewis, Rice & Fingersh
St Louis City
A
Lease
3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
Building Lease/ Class Sale
10
Vacancy & Absorption
Net Absorption by Class
Vacancy Rate by Class
120,000
20.0% 17.5%
Net Absorption (SF)
Vacancy Rate (%)
15.0%
13.0%
10.0%
5.0%
96,993
100,000
16.5%
80,000 60,000
40,000 20,000 0 -1,176
-20,000 -40,000
0.0%
A
B
C
A
B
C
Net Absorption by Quarter
Vacancy Rate by Quarter
500,000
20%
16.8%
422,092
16.0% 15.5% 15.4% 15.4%
15%
400,000
Net Absorption (SF)
Vacancy Rate (%)
-40,132
-60,000
10%
5%
343,611
300,000
198,338
200,000 100,000
53,930 55,685
0
0%
2013 Q3
2013 Q4
2014 Q1
2014 Q2
2014 Q3
2013 Q3
2013 Q4
2014 Q1
2014 Q2
2014 Q3
Vacancy & Absorption continues to next page... 3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
11
Vacancy & Absorption [continued]
Vacancy Rate by Class 19.5%
20.0%
19.0% 16.7%
18.0%
16.0%
16.8%
Vacancy Rate (%)
16.0%
14.0%
10.5%
12.0% 10.0% 8.0% 6.0% 4.0% 2.0%
0.0% A
B
CBD
C
Suburban
Net Absorption by Class 100,000
81,616
Net Absorption (SF)
80,000 60,000 40,000
15,377
15,803 2,807
20,000 A
B
C
(3,983)
(20,000) (40,000)
(55,935)
(60,000)
CBD
Suburban
3Q 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 Seth Brown (816) 914-9855 sbrown@xceligent.com James Cook (602) 363-6691 jcook@xceligent.com
COMMERCIAL REAL ESTATE INFORMATION 3Q 2014 Market Trends Š 2014 by Xceligent, Inc. All Rights Reserved
13