urbanSTL

no way, that's too high!

In the central business district vacancy rates are approx 14%



Office market rebounds as vacancies drop, rates rise

St. Louis Business Journal - April 28, 2006by Lisa R. Brown



The first quarter 2006 St. Louis office market showed modest improvement in both vacancy rates and asking lease rates, indicating the office market is rebounding back to 2001 levels.



According to EVS Realty Advisors Inc., the overall office vacancy rate in St. Louis at the end of the first quarter of 2006 was 12.3 percent, which is down from a year ago, when the vacancy rate was at 13.7 percent. Nationwide, the average office vacancy rate ranges between 12.8 percent and 14.5 percent.





Overall average asking gross rental rates were up two cents in the St. Louis region, to $17.99 at the end of the quarter, slightly up from a year ago, when the average office rent in the region was $17.97.



In St. Louis' submarkets, the Creve Coeur/Westport area has the highest office vacancy rate, at 17.3 percent. Clayton's vacancy rate is 12.3 percent, and downtown's central business district is 14.1 percent. St. Charles posted the lowest vacancy rate in the region, at 6.9 percent.



EVS Realty Advisors President Jack Reis said the attractiveness of the Clayton office market has remained strong for the last five years. The highest Class A asking rate in the region is in Clayton at Shaw Park Plaza, at $31 per square foot. The average asking rate for Class A office space in Clayton is $22.32, according to EVS Realty Advisors. "That trend line is up and these rates will continue to go up in Clayton," Reis said.



The biggest difference since 2001 is the changing landscape of the downtown real estate market. Downtown's overall vacancy rate for Class A office space has increased from 10 percent at the end of 2000 to 18 percent at the end of the first quarter 2006.



Increased development downtown in recent years hasn't made much of a dent on office vacancy rates or lease rates, but that has the potential to change, Reis said. "Office buildings have been sold at record prices but the users going there hasn't happened yet. I think that will happen, with Ballpark Village and other development under way."



For Class A office space in the region, vacancy rates are back to 2001 levels, at about 15.6 percent. Vacancy rates in the region rose to as high as 19 percent in 2002 before going back down. "It would be safe to say that we are approaching equilibrium in supply and demand. What will happen is that demand is going to get stronger than the supply," Reis said. "Over a five-year period, we've recovered back to 2001 levels. The question becomes, 'How far will demand outperform supply?'"



One of the biggest impacts on the office market is office employment. The estimated office employment in the St. Louis region is 291,100 workers.



Chris Fox, managing director of Gateway Commercial, said office employment dipped between 2001 and 2003 --to a low of 286,500 workers, and finally began to turn around in 2004.



"Without office employment, there is no office market," he said. In 2005, office employment was up 1.4 percent from 2004. In the past year, the number of office workers in the region has grown by 1.6 percent and is expected to reach the 2000 level, or 295,700 workers, by the end of 2006.



lrbrown@bizjournals.com



http://stlouis.bizjournals.com/stlouis/ ... ocus6.html

bpe235 wrote:^ Personally I would like to see more residential. To the tune of at least 500 units or so, with a good mix of office mixed in. After all this is a mixed use development. The office is crucial to attract new businesses (rumors of corps not being able to find large chunks of continuous space) and keep 7-6 activity high, where as the residential will help to support the retail outlets and provide some life afterhours and on the weekend...

I agree with you...there needs to be a balance. A tower with Class A office space would be great, but why must residential space be sacrificed? Maybe they should just add another tower instead!



I don't understand what appears to be Cordish's pessimism about the residential market. It seems to me that if anything, residential development at Ballpark Village might threaten similar projects elsewhere in downtown, but that's not Cordish's problem.

http://www.stlcommercemagazine.com/arch ... inner.html

By Bill Beggs Jr.



Adding fireworks to the positive Oct. 27th announcement about the $400 million-plus Phase I of Ballpark Village, that very Friday night the St. Louis Cardinals won their first World Series title in 24 years.



Go crazy folks!



Over the past 10 months, the RCGA has been working with The Cordish Co. (the nation’s largest developer of entertainment districts and concepts) and the City of St. Louis to bring Ballpark Village to fruition. Pending approval of a formal development agreement and the concurrence of additional local and state authorities, Phase I construction could begin next spring, with anticipated completion in spring 2009.



Officials project Ballpark Village to not only bring millions more destination visitors to the region, but also generate tens of millions of dollars of new annual tax revenues in expanded private investment and new jobs. According to the economic impact analysis by Bryan Bezold, the RCGA’s chief economist, Phase I will provide $273 million in annual economic benefit. Meanwhile, Phase I construction will generate a further economic impact of $724 million.



From an employment standpoint, the first phase will have a total impact of 3,040 permanent jobs, with another 3,000 construction jobs throughout the course of development. Projected net benefit to the City alone is $291 million, with $142 million to the St. Louis Public Schools.



When Phase I is complete, Bezold projects that:



- Ballpark Village businesses will employ 1,969 people

- Those jobs will support another 1,070 jobs regionally

- Annual economic impact will be approximately $273 million



Cordish estimates that direct benefits to the City of Phase I will include:



- Additional $291 million in new tax revenue over the next 40 years

- Additional $142 million in new tax revenue for St. Louis Public Schools



After construction, ongoing commercial operations will also have significant impact: Phase I construction will support approximately 1,600 jobs; those will support 1,400 jobs elsewhere, for a total employment impact of some 3,000 jobs.

It was at 14% in April. Was that before or after Busch left its offices? I know that wouldn't account for 10% of the market, but I'm sure it was a significant blow.

^ Reis, they provide commercial real estate data for markets across the US, puts 3rd quarter downtown overall vacancy at 17.9%.

slightly OT, but anyone know the exact boundaries of DT and the central business district...

thanks... maybe i'm just picky, but it drives me nuts when people refer to Slu, the brewery, AG edwards, etc as being DT

OK... So, assuming a vacancy of 16%, can we really support a high rise commercial only building in the BPV?

I am NOT knowledgeable about the movement in Commercial markets, so am trying to gain a little knowledge here.

Actually, this post makes perfect sense. Any potential "corporation" would want to have a dedicated "large space" (I guess labelled as Class A) area built, into which they could host all their business functions.



So... do you think BPV should go for a committment from such a corp before deciding on office/Res ratio?

The Cardinals' offices are currently in the Deloitte (fka MCI) building on S. 4th St. Anyway, I would definitely cheer on newer office buildings, if it meant older ones from the really old 705 Olive to becoming old 1 South Memorial going residential.



But most strongly, I want to see the area south of Market Street diversify from just the inward-looking office buildings and hotel complexes presently near the new stadium. Pointe 400 and Cupples Ballpark Lofts are a start, but a mixture of all activities (office, retail, entertainment and residential) will provide livelier streets day and night.

southslider wrote:The Cardinals' offices are currently in the Deloitte (fka MCI) building on S. 4th St. Anyway, I would definitely cheer on newer office buildings, if it meant older ones from the really old 705 Olive to becoming old 1 South Memorial going residential.



But most strongly, I want to see the area south of Market Street diversify from just the inward-looking office buildings and hotel complexes presently near the new stadium. Pointe 400 and Cupples Ballpark Lofts are a start, but a mixture of all activities (office, retail, entertainment and residential) will provide livelier streets day and night.

One Memorial is still a pretty nice building, but it would be great for residential, just like Pointe 400 is. Talk about unbelievable views!



I agree with you completely on the area south of Market. BPV will help a great deal, but I still think that the parking lot at Broadway and Walnut (just east of the ballpark) is an absolute killer. I would love to see something built there so that there is life on three sides of Busch Stadium. That area is such a dead zone right now.

And to append the earlier definition of "downtown," there are actually two distinctly defined neighborhoods that downtown comprises: Downtown (defined earlier) and Downtown West, which has the same north/south boundaries and extends to Jefferson on the west.

I think it's a good sign that the Village developers say they are receiving strong interest in the office space. No reason they can't build big residential towers and big office towers. The more the merrier!

Framer wrote:I think it's a good sign that the Village developers say they are receiving strong interest in the office space. No reason they can't build big residential towers and big office towers. The more the merrier!

I agree. I can't imagine a dip in demand for living at Ballpark Village. I've talked with many people that would jump at the chance to live there, and some of them presently live in the suburbs and probably wouldn't consider city living otherwise. Who knows? Maybe Cordish will add another tower or two to their subsequent phases!

I will be moving from Dogtown to the Ventana (17th and Wash), but when the BPV residential units come up for sale, I will be in line

Every so often, there's talk about sustainability of the DT housing market. There is a huge cohort of baby boomers and a generally aging population that would seem to feed and support demand for residential in DT for the next 25 years.

Matt wrote:Every so often, there's talk about sustainability of the DT housing market. There is a huge cohort of baby boomers and a generally aging population that would seem to feed and support demand for residential in DT for the next 25 years.

I have an uncle who has been living in New York for the last 50 years without a car. He is in his 80s now and still goes everywhere. What would it take to make it possible for the Boomers to live downtown without a car?



In New York they have cabs everywhere. I was trying to think of some way that the city could subsidize cab service among any venues downtown and the Grand Center. Cheap or free taxi travel among downtown venues would really make downtown attractive to Boomers, not to mention tourists. Maybe taxing hotel rooms more to pay for it? Or tax taxis that enter the city to get businessmen on travel accounts? Or airport users?



I don't know if taxis will take you betwen 2 places both downtown now, since the fare would be low. But if the city put the cabs on salary, or something, cheap taxis could be a way to attract boomers to live downtown without a car.

Gary Kreie wrote:What would it take to make it possible for the Boomers to live downtown without a car?

About 50 years.

Gary Kreie wrote:


I have an uncle who has been living in New York for the last 50 years without a car. He is in his 80s now and still goes everywhere. What would it take to make it possible for the Boomers to live downtown without a car?



In New York they have cabs everywhere. I was trying to think of some way that the city could subsidize cab service among any venues downtown and the Grand Center. Cheap or free taxi travel among downtown venues would really make downtown attractive to Boomers, not to mention tourists. Maybe taxing hotel rooms more to pay for it? Or tax taxis that enter the city to get businessmen on travel accounts? Or airport users?



I don't know if taxis will take you betwen 2 places both downtown now, since the fare would be low. But if the city put the cabs on salary, or something, cheap taxis could be a way to attract boomers to live downtown without a car.

How about bike sharing?? maybe even 3 wheelers for ?



http://members.aol.com/humorme81/citybike.htm

There are car-sharing companies in Europe as well. You pay a monthly fee and then reserve a car or call to request one when you need it. Unfortunately I don't think there's enough desity (residential or retail) for bike or car-sharing here. The problem is that the places people want to travel (home or the store) aren't located in dense areas. For this to work you need a large number of people sharing areas first, then they may choose to share transportation. Of course for people who would like to live without a car I'd advocate renting. Even an older, high mpg car is expensive to own. You could rent a car often for the same cost. And don't forget to use St. Louis' own Enterprise. (I understand that they may pick you up and make you look good at your high school reunion! )