Fundamentals remain strong in the first quarter of 2018. Employment in
industrial-occupying industries has risen year-over-year for 59 consecutive
months, increasing 8.1 percent in that time. Manufacturing employment
should see a boost as the Granite City steel plant in the Metro East is planning
to add 500 jobs after re-opening one of its two blast furnaces.
The region absorbed just under a million square feet in the first quarter.
Vacancy remains at a cyclical low and is only 5.1 percent. While 2017 had just
two leases over 500,000 square feet, that number has already been matched
in 2018. World Wide Technology (WWT) will be expanding and relocating in
the Metro East. The technology giant signed a two million square foot lease
for two new buildings in Gateway Commerce Center. WWT will vacate 1.6
million square feet in Lakeview Commerce Center when its lease expires in
2020. St. Charles County is seeing a lot of activity as Amazon announced plans
for its first building in the submarket. The e-commerce company is doing a
build to suit for 855,000 square feet at Premier 370. Another e-commerce
company, Grove Collaborative, signed a lease (138,000 square feet) for the
remainder of Duke Realty’s first speculative building in Premier 370. Duke has
now proposed a 375,000 square foot spec building in the park. The park will
total almost 2.5 million square feet when both are complete.
Development activity remains strong. The market currently has more than six
million square feet either planned or under construction, with more expected
as several developers remain active. User activity has led to a healthy balance
with speculative construction. Buildings from Davidson Surface/Air and MiTek
will add 1.1 million square feet of new space next quarter as both expand
operations in North County.