office - sior st. louis · scottrade and edward jones, is the only sector to replace all jobs lost...
TRANSCRIPT
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Office
Scott Savacool, SIOR, CCIM Sansone Group
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Jim Mosby, SIOR, CCIM Senior Managing Director, Principal, Cassidy Turley
Chris Fox, SIOR, CCIM
Executive Vice President, Gershman Commercial
Tom Bajardi, SIOR, CCIM Senior Associate, Sansone Group
Art Kerckhoff, CCIM Vice President, CBRE
Ruth Sergenian
St. Louis Regional Chamber
Office Committee
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Agenda 2013 Market Highlights
Leasing Investment Sales / User Sales
The Results
2014 Market Drivers
Forecast & Predictions
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2010 - 2012
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2012
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2013
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Office Summary • Office Inventory – 48,920,872 SF • 2013 Net Positive Absorption – 727,543 SF • Four consecutive quarters of positive absorption
(first time since 2004)
• All office submarkets ended 2013 with positive absorption (first time since 2000)
• Overall vacancy of 15.7% (lowest since 2008)
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Overall Unemployment
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
2008 2009 2010 2011 2012 2013
U.S.
St. Louis
Source: St. Louis Regional Chamber
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St. Louis Office Employment
290,000
295,000
300,000
305,000
310,000
315,000
2008 2009 2010 2011 2012 2013 2014
Source: St. Louis Regional Chamber
Total St. Louis MSA Office Using Employment
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Major St. Louis Employers
1. BJC Health Care 2. Boeing Defense Systems 3. Washington University 4. SSM Health Care 5. Scott Air Force Base 6. Wal-Mart Stores, Inc. 7. Schnucks Markets, Inc. 8. United States Postal Service 9. St. John’s Mercy 10. McDonald’s
1. BJC Health Care 2. Boeing Defense, Space, Security 3. Washington University 4. Scott Air Force Base 5. SSM Health Care 6. Mercy 7. Schnucks Markets, Inc. 8. Wal-Mart Stores, Inc. 9. McDonald’s 10. AT&T
2008 2013
Source: St. Louis Business Journal Book of Lists
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Healthcare, which never shrank, has added 28,000 jobs since 2007
Financial Services, fueled by firms like Wells Fargo, Stifel, Scottrade and Edward Jones, is the only sector to replace all
jobs lost in the recession
St. Louis is 2nd only to New York in concentration of brokerage and financial services firms
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St. Louis Office Occupancy
66.00% 68.00% 70.00% 72.00% 74.00% 76.00% 78.00% 80.00% 82.00% 84.00% 86.00% 88.00% 90.00% 92.00%
2008 2009 2010 2011 2012 2013
Statistics are a blended number from a variety of business sources
Class A
Class B
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Absorption
-‐‑800,000
-‐‑600,000
-‐‑400,000
-‐‑200,000
0
200,000
400,000
600,000
800,000
2008 2009 2010 2011 2012 2013
Statistics are a blended number from a variety of business sources
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Average Asking Rent Trends
$14.00
$16.00
$18.00
$20.00
$22.00
$24.00
$26.00
2008 1Q
2008 3Q
2009 1Q
2009 3Q
2010 1Q
2010 3Q
2011 1Q
2011 3Q
2012 1Q
2012 3Q
2013 1Q
2013 3Q
Clayton
Suburban
City
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Market Statistics Inventory Occupancy Absorption Rental Rate Class A
Occupancy Class A
Rental Rate
Downtown 11.6 MSF 79.9% +160,000 SF $16.62 86.4% $19.12
Clayton 6.9 MSF 87.8% +5,000 SF $23.70 90.8% $25.79
West County 16.8 MSF 87.1% +276,404 SF $20.69 92.5% $23.68
South County 2.6 MSF 86.8% +70,129 $20.79 86.3% $22.74
North County 6.2 MSF 83.7% +169,475 SF $17.38 89.3% $20.78
St. Charles 4.4 MSF 88.1% +46,535 SF $17.24 92.2% $19.10
Statistics are a blended number from a variety of business sources
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Sublease Space
0
100,000
200,000
300,000
400,000
500,000
600,000 550,223 SF 453,971 SF
262,200 SF
Statistics are a blended number from a variety of business sources
½ of 1%
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Large Blocks of Space
0
100
200
300
400
500
600
700
800
900
1000
<10,000 10,000-‐‑20,000 20,000-‐‑50,000 50,000-‐‑100,000 >100,000
Clayton
City
Suburban
10 7
Statistics are a blended number from a variety of business sources
5 in CBD 4 in CBD
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Large Leases
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St. Louis City
130,000 SF renewal at St. Louis Place
110,000 SF renewal at 10 S. Broadway
44,000 SF new lease at Bank of America Plaza
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Northwest County
99,000 SF new lease at 3470 Rider Trail
78,000 SF new lease at 13022 Hollenberg
46,000 SF new lease at 3301 Rider Trail South
43,000 SF new lease at Riverport Office Center
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South County
17,158 SF renewal at Southwest Exec
42,000 SF new lease at Laumeier II
12,758 SF new lease at Laumeier II
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West County
58,494 SF new lease at 520 Maryville Centre 45,688 SF new lease at 575 Maryville Centre
46,161 SF new lease at 575 Maryville Centre
51,000 SF new lease at CityPlace 6
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St. Charles County
90,000 SF new lease at The Crossings in Wentzville
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Clayton
56,000 SF new lease at 101 S. Hanley
30,000 SF sublease at Pierre Laclede II
26,000 SF new lease at Shaw Park Plaza
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Investment Sales
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Tryperion Partners
6 building portfolio from Duke Realty South County, West County, Westport
637,000 SF $84,000,000 $131.87 / SF
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Metonic Real Estate Solutions
Cityplace 6 from Koman Group Creve Coeur 224,000 SF $40,300,000 $180 / SF
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Westport Capital Partners
14528 S. Outer Forty from IPERS West County 210,500 SF $16,750,000 $80.00 / SF
*This value was impacted by the pending vacancy of Mercy (187,000 SF) which represents
89% of the building
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Griffin Capital Essential Asset REIT
13655 Riverport Drive from Columbia Property Trust Earth City, Riverport
205,107 SF *Portfolio sale of 23 properties across 9 markets
resulting in an averaged value of $129.25 SF for this building
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Hogan Trucking
2150 Schuetz from TriStar Properties Maryland Heights
80,000 SF $7,280,000 $91.00 / SF
Owner / User Purchase
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2013 Results
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2014 Market Drivers
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Employment Forecast
• Office Using Employment Growth of 2.8%
• 8,562 Additional Jobs in 2014
• Double the Growth of 2013
• @ 100 SF per employee = 856,200 SF of absorption
US Bureau of Labor Statistics
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Large Tenant Effect
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AT&T vacating over 1 million SF of space between 2015-2017
Laclede Group moving from Laclede Gas Building to Gen Am Building and
vacating 100,000 SF
Large Tenant Effect – St. Louis City
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Bank of America vacating approximately 100,000 RSF at Bank of America Tower (100 N Broadway) by
the end of 2014
Large Tenant Effect – St. Louis City
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RGA vacating 180,000 SF at Timberlake Corporate Center and moving to their
new corporate headquarters
Mercy vacating over 200,000 SF leased space throughout St. Louis and moving
to their new corporate headquarters
Large Tenant Effect – West County
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Forecast & Predictions
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The Forecast • Market conditions • Balanced market…equal playing field • Limited supply of large blocks of space will
force large users to rethink their requirements • Financial services sector will continue to grow
• Healthcare sector will continue to increase
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