ST. LOUIS—Although the top office buildings in the St. Louis region saw vacancy rates tick up recently, since 2008 the group as a whole has seen consistent growth in occupancy and rents, according to JLL's 2015 Digital Skyline, its study of the top office buildings throughout the US. Six of the region's 13 Skyline properties are in suburban Clayton, and with rents there setting records, company officials believe a spec office building could rise in the future, perhaps by 2018.

“Clayton is commanding the highest rates,” David B. Steinbach, a St. Louis-based executive vice president with JLL, tells GlobeSt.com, primarily because it has the four newest properties. This includes the Plaza in Clayton, Centene Plaza, Shaw Park Plaza and 8235 Forsyth Blvd., all constructed since 2000. The last tower built in the St. Louis CBD was the 42-floor Metropolitan Square in 1989.  

In fact, the four top trophy properties in Clayton now command asking rents 44% higher than the rest of the Skyline properties, “the widest gap we've seen since 2010,” Steinbach says. “Tenants looking for space in Clayton are not getting their first choice in offices,” and JLL expects this robust level of activity will spread to the other class A buildings. The company rates the regional market as neutral, but by 2017 it will switch to a landlord-favorable market.

Clayton has already started to attract interest from significant investors. As reported in GlobeSt.com, KBS Real Estate Investment Trust III recently purchased Hanley Corporate Tower, a 346,451 square-foot office building in Clayton, from Duke Realty for $62.25 million.

Since 2008, the Skyline properties have seen vacancy rates decline 550 bps to 9.0%. During that time, the vacancy rate in the rest of the region's office market declined 140 bps to 15.8%. There are only three blocks of space greater than 30,000 square feet currently available at Skyline properties, all in the CBD.    

 “The CBD is still a relatively strong market,” Steinbach adds, although with an overall vacancy rate of about 20% it's certainly the weakest in the metro area. And AT&T will soon finish moving its employees out of One AT&T Center at 900 Pine St., a Skyline property in the CBD. Although there has been some talk over the past few years that new tenants could move in, AT&T and its predecessor have been the only tenants since the building opened in 1986, and Steinbach feels “the likely answer is that it's not going to get filled. That is my best guess unfortunately.”

Still, a start-up tech scene has appeared downtown, he adds, and a few trend-setting tenants have recently chosen to stay in the CBD. HOK, for example, the St. Louis-based international design firm, recently took over a very visible space on the first two floors at 10 S. Broadway just next to the city's iconic Gateway Arch.  

And the CBD is on the verge of its biggest change in decades. A public-private partnership will complete by 2016 a $380 million renovation of the Arch. The project, called CityArchRiver 2015, will for the first time connect the CBD to the riverfront and the park surrounding the Arch with one continuous greenway. “I think it will make downtown into a much more inviting environment and start to attract more companies.”