ST. LOUIS—As reported yesterday in GlobeSt.com, in the firstquarter the industrial market in the St. Louis metropolitan arearecorded 1,795,283-square-feet of positive absorption. “That ismore than in all of 2013,” Ed Lampitt, vicepresident and principal of Cassidy Turley in St.Louis, tells GlobeSt.com. “And 2013 was an awfully good year.”

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“We haven't had that kind of absorption since 2004,” addsAlex Cain, a financial analyst in the St. Louisoffice.

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Lampitt attributes that huge number in part to the increasingactivity in modern bulk distribution buildings. Online sales andthe strengthening economy have increased demand for all kinds ofconsumer products and distributors across the I-70 corridor, whichstretches from the Metro East area in Illinois to the North Countyand St. Charles County submarkets, have responded by taking morespace.

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The North County submarket saw the most activity. TrueManufacturing signed the largest new lease with542,600-square-feet at 13330 Lakefront Dr., and SSM HealthCare signed a lease with 96,480-square-feet atDukePort VIII. In total, North County saw858,841-square-feet of positive absorption in the firstquarter.

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Furthermore, much like it has done in the Kansas City region,GM has launched a major expansion of a local autoplant, Lampitt points out. And the $133 million expansion of theplant in suburban Wentzville has parts suppliers, eager to feedtheir products into the growing factory, flocking to the area.

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The big quarter for industrial property was not exactly asurprise. “We've been feeling for a year that there has beenpent-up demand,” he says. For example, as reported in GlobeSt.com last October, North Countyhad 345,000-square-feet of net absorption in the third quarter,followed by St. Charles County which netted 174,000-square-feet.The vacancy rate hit 8.1% back then, and by this quarter sank to7.2%.

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“We are following the national trends in industrial realestate,” Lampitt says, and like many other cities, “we're justgetting to the tipping point where we will see newconstruction.”

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In fact, St. Louis-based TriStar Propertiesrecently began development on the first speculative industrialbuilding to be constructed in the St. Louis metro area since 2007.Lampitt will lead the leasing effort for the 672,000-square-footfacility at Gateway Commerce Center, a big-boxindustrial park in Edwardsville, IL, at the intersection of I-270and I-255 just east of St. Louis. The developers will have theclass A building ready for occupancy in 2014 and have thecapability to expand it to more than 1-million-square-feet.

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“I believe we will see additional announcements of newdevelopments in the near future,” Lampitt says.

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KP Development, a St. Louis-based build-to-suitdeveloper, for example, has the 294-acre formerChrysler plant in Fenton under contract and willdevelop a master plan for its redevelopment. Lampitt says the lackof suitable land in this submarket has historically resulted in avery low vacancy rate. “This development will do extremelywell.”

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Neither Lampitt nor Cain expects the next three quarters togenerate the same level of absorption as the first. “The starsaligned in the first few months of this year,” says Lampitt, andmany deals got signed at nearly the same time. “If we end up at2.5-million-square-feet by the end of the year that would begreat.”

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“If we tip over 2-million-square-feet, that would be the mostwe've seen since 2004,” adds Cain.

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.