ST. LOUIS—The St. Louis industrial market has come a long way in the past few years, largely making up all the ground lost during the recession. Vacancy rates have plunged, few large space options remain, and many believe the region is ripe for new development, including speculative construction, according to second quarter statistics just published by Xceligent.

“The St. Louis industrial market finished the first half of the year on a high note as the market absorbed over 1.5-million-square-feet of space” in the second quarter, the Xceligent researchers found. The momentum was fueled by six transactions of more than 100,000-square-feet. All six were for warehouse or distribution buildings. Just three user sales accounted for nearly 900,000-square-feet.

Wainwright Industries, for example, took 433,520-square-feet in the South St. Louis County submarket, the largest transaction of the year so far, Xceligent found. And Amerco Real Estate Co., the parent company for U-Haul, bought the old Globe Drug buildings in downtown St. Louis. At 272,000-square-feet, it was the largest industrial deal in the city. U-Haul plans to transform the property into its 27th center in Missouri.

“Space options for tenants seeking more than 100,000-square-feet in modern distribution buildings with at least 28′ clear heights are becoming more extinct by the day,” the researchers noted. “This shortage of inventory is most pronounced in the Northwest and St. Charles areas.”

The largest lease deal of the quarter was by Unilever for 513,474-square-feet, an expansion of 216,379-square-feet, at the TriStar Properties’ Gateway Distribution Center, just across the river in the Metro East area. And the extraordinary level of demand has kicked off speculative development.

PCCP, LLC, a real estate finance and investment management firm, and TriStar, for example, just formed a joint venture to acquire 45 acres of land for the speculative development of a 673,000-square-foot bulk warehouse building at Gateway Center.

And on the Missouri side, Panattoni will soon begin construction on their Aviator Distribution Center, Xceligent found. Furthermore, “Duke’s Premier 370 project looks to be resolving their bond issues for a 2015 delivery.”

“While landlords continue to push asking rates in properties with more than 100,000-square-feet, rent concessions coupled with stabilized lease rates remain within the smaller product,” the company concluded. “Landlords are continuing to play it safe by minimizing their vacancy exposure by encouraging tenants to renew.”