St. Louis' industrial market has seen improvements in quite a few categories in 2024 and the fourth quarter, according to a report from Colliers.
Most notably, leasing activity hit 1.96 million square feet, up by more than a million square feet from the previous three months. Also, it marked the highest quarterly activity since 3.42 million square feet of space was leased in 2021. The biggest deals involved Armstrong Logistics, and Circle K, which leased 487,521 square feet, and 211,269 square feet, respectively.
Net absorption in the full year turned positive to 1.99 million square feet compared with negative territory in 2023. Plus, the fourth quarter's +1.16 million was up significantly from just +210,000 square feet in the previous three months.
Vacancy rates in the last three months went down to 5.15 percent compared with 4.78 percent in the previous quarter. West County experienced the best recovery, with the category there dropping by 2.7 percent.
While new supply increased, construction has slowed significantly, with 2.10 million square feet being built in the fourth quarter, dropping from 3.35 million a year ago. Plus, no new projects have started since the June quarter.
The worst performance came from asking rents, which slipped to $5.86, from $6.10 NNN. However, Colliers predicts that the category won't fall into an abyss going forward.
"Overall, rental rates are expected to remain stable in the near term, with little anticipated fluctuation," the CRE firm wrote.
"The market’s balance of supply and demand should continue to support this trend."