Downtown St. Louis Office Market Poised for Gradual Turnaround

ST. LOUIS, MO— Slower employment growth and increased speculative office development will cause a mild uptick in the St. Louis vacancy rate this year, according to the 2008 National Office Report by Marcus & Millichap, the nation’s largest real estate investment services firm. Occupancy in downtown St. Louis is forecast to improve in 2008, a trend that should continue in the future.

Also included in the report is the firm’s annual National Office Index (NOI), a snapshot analysis that ranks 43 office markets based on a series of 12-month forward-looking supply and demand indicators. St. Louis makes its debut on the NOI at No. 37.

“Near-term fluctuations aside, St. Louis’ positive extended outlook will sustain investor demand in 2008, though overall sales activity may moderate somewhat,” says Jeffrey R. Algatt, (photo at right) regional manager of Marcus & Millichap’s St. Louis office.

Following are some of the most significant aspects of the St. Louis Office Research Report:

· Employers will create 11,600 jobs this year, a 0.8 percent gain.
· Developers will bring 640,000 square feet of office space to the market, representing a 1.4 percent addition to inventory.
· Vacancy is forecast to end the year at 14.9 percent.
· Asking rents are expected to reach $20.45 per square foot, a gain of 2.5 percent, while effective rents will advance 2.1 percent to $16.82 per square foot.
· Investors seeking upside potential will continue to target properties in the Clayton submarket.

In the 2008 NOI, Seattle moved up three places to secure the No. 1 spot, surpassing last year’s leader New York City, which slipped to No. 2. Boston moved up two spots to No. 3, while San Francisco jumped 12 places to the No. 4 position. Los Angeles slipped two spots, coming in at No. 5.

For a copy of Marcus & Millichap’s National Office Report and the complete NOI rankings, visit www.MarcusMillichap.com.


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http://www.marcusmillichap.com/