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Cassidy Turley� offers a variety of commercial real estate services including sustainability consulting and property management for our clients


Cassidy Turley� offers a variety of commercial real estate services including sustainability consulting and property management for our clients.

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									                                                                                         Office Market Snapshot
                                                                                                        St. Louis • Second Quarter • 2013

                                                           Market Tracker                 Vacancy   Net Absorption      Deliveries          Asking Rent
                                                           *Arrows = Current Qtr Trend    16.0%     247,000 SF          0 SF                $18.54 FS

                                                           Strong Second Quarter Lowers St. Louis Office Vacancy to 16%
                                                           The St. Louis office market had a very strong second quarter realizing 281,000 square
                                                           feet of positive absorption. As a result, the St. Louis office vacancy rate decreased to
                                                           16.0%, a level not seen since the first quarter of 2011. The second quarter figures were
                                                           closely watched after the first quarter disappointed with 34,000 square feet of negative

                                                           The bifurcation of class A and class B office vacancy continued in the second quarter with
ST. LOUIS OFFICE                                           class A space realizing 295,000 square feet of positive absorption while class B space
                                                           had negative absorption of 14,000 square feet. The varying performance between the two
Economic Indicators                                        classes is representative of a flight to quality as tenants use aggressive rental rates to
                                                           upgrade the quality of their space. At of the end of the second quarter, vacancy in class
                                     Q2 12        Q2 13
                                                           A space was 12.0%, which is significantly better than the 21.7% vacancy in class B
  St. Louis
                                     1310.4       1319.8   space. Furthermore, the spread in vacancy between class A and class B space has grown
  Employment                                               to 9.7%, which is significantly higher than the 10-year average spread of 7.3%.
  St. Louis
                                     7.30%        7.00%
  Unemployment                                             The absorption gains in the second quarter were widespread with only the Clayton and St.
                                                           Charles County markets realizing negative absorption (-4,000 and -17,000 square feet,
  U.S. CCI                            65.4         81.4
                                                           respectively). This marks the second quarter in a row that the usually resilient Clayton
                                                           market experienced negative absorption despite Fifth Third Bank increasing their
  U.S. Unemployment                  8.20%        7.60%    presence in Clayton by 23,000 square feet during the quarter. However, the concern in
                                                           Clayton will be short-lived as a number of large deals were consummated in the second
                                                           quarter that have yet to impact the market fundamentals.

Net Absorption                                             The West County market had the most significant growth in the region, realizing 220,000
                                                           square feet of positive absorption in the quarter, the majority of which was located in the
                                                           Chesterfield and Creve Coeur submarkets. The most significant transactions that led to
                                                           this growth were Cequel Communications leasing 46,000 square feet at 575 Maryville
  100,000                                                  Centre Drive, 58,000 square feet at 520 Maryville Centre Drive and the 55,000 square
                                                           foot relocation of Brown Smith Wallace LLC to Creve Coeur from Olivette.
                                                           The Downtown market continued to strengthen in the second quarter with 26,000 square
                                                           feet of positive absorption, giving Downtown three consecutive quarters of growth.
 (300,000)                                                 Although Downtown continues to have the areas’ highest vacancy rate at 20.7%, the
             2008   2009   2010    2011   2012    2013
                                                           fundamentals have been steadily improving. The North County and Mid-County markets
                                                           both realized positive absorption in the quarter with Mid-County absorbing 10,000 square
                                                           feet and North County absorbing 39,000 square feet. North County should continue this
                                                           positive trend as Equifax, Charter, and U.S. Bank all signed deals in the second quarter
Vacancy Rate Absorption
          Net                                              that will impact the submarket through the end of the year.

                                                           The health of the St. Louis commercial real estate industry is often determined by the
                                                           amount of available contiguous office space. In comparison to this time last year, the
                                                           amount of available large blocks of space greater than 50,000 square feet has diminished
                                                           by about 33% as more local companies relocated or expanded within our city. As a result,
  2008          2009
               2009     2010
                       2010        2011
                                  2011     2012
                                          2012      2013
                                                   2013    the demand for these spaces increasing. This is particularly true for North and West
                                                           County where these available blocks of space have decreased from 15 blocks to ten
                                                           throughout the past year. Eighty percent of the diminished space has been class A.

Cassidy Turley Office Market Snapshot
St. Louis, Missouri • Second Quarter • 2013

                                                                                                                                                         UNDER              AVERAGE                 AVERAGE
                                      TOTAL                               SUBLET          DIRECT          VACANCY      CURRENT NET    YTD NET
                                                      INVENTORY                                                                                        CONSTRUC-          ASKING RENT ASKING RENT
                                      BLDGS                               VACANT         VACANT            RATE        ABSORPTION ABSORPTION              TION            (ALL CLASSES)                 (CLASS A)


  Downtown                              59            11,124,000          18,000        2,280,000         20.7%            26,000     77,000                   -                $16.61                   $19.47

  Clayton                               64             6,831,000           40,000        848,000          13.0%            (4,000)    (36,000)                 -                $23.44                  $25.24

  Mid-County                            62             2,204,000           10,000        368,000           17.2%           10,000     (28,000)                 -                $16.71                   $19.91

  West County                          249            16,199,000          144,000       2,060,000         13.6%           220,000     156,000               405,000             $20.40                  $23.39

  North County                          57             5,346,000           57,000        987,000           19.5%           39,000     28,000                   -                $17.24                  $20.42

  South County                          59             2,514,000             -           369,000           14.7%            6,000     34,000                   -                $20.19                  $22.07

  St. Charles County                    87             4,136,000           8,000         535,000           13.1%           (17,000)   15,000                   -                $15.55                   $18.51


  Class A                              255            28,545,000          224,000       3,206,000         12.0%           295,000     262,000               405,000             $21.80

  Class B                              382            19,807,000          52,000        4,242,000          21.7%          (14,000)    (15,000)                 -                $16.09

 TOTAL                                637            48,353,000           275,000       7,447,000         16.0%           281,000     247,000            405,000                $18.54                  $21.80

Key Lease Transactions 2Q 2013                                                                                                         Office Submarkets
                                                                                                                                       St. Louis, Missouri
PROPERTY                      SF                    TENANT                          TRANSACTION TYPE                SUBMARKET

3470 S. Rider Trail          99,000                  Equifax                               New                       Earth City

Solutia                      92,000                   Savvis                        Renewal & Expansion             Chesterfield
                                                                                                                                                                           70                           2
13022 Hollenberg Dr.         78,000          Charter Communications                        New                       Hazelwood                                1

                                                                                                                                                                                          4       170
Maryville 520 Building       58,000                 Cequel III                             New                      Chesterfield                                                  270
                                                                                                                                                                                                  8          5
101 South Hanley Corporate
                             58,000                   NISA                                 New                        Clayton                                         3

3301 S. Rider Trail          46,000                 US Bank                                New                       Earth City                                                   44
                                                                                                                                                                                              7         55

Solutia                      46,000                 Cequel III                             New                      Chesterfield

The Woodfield Building       42,000             SSM Health Care                     Renewal & Expansion               Olivette
                                                                                                                                          1.   St. Charles County          5.   St. Louis City
                                                                                                                                          2.   North County                6.   Downtown
Laumeier Office Pk II        42,000               New Balance                              New                     Kirkwood South         3.   West County                 7.   South County
                                                                                                                                          4.   Mid County                  8.   Clayton

Riverport Tower              31,000          Altisource Solutions Inc.                     New                       Earth City

10 South Broadway Building   17,000    Hawkins, Parnell & Thackston LLP                  Renewal                     Downtown

                                                                                                                                               Tim Walsh
                                                                                                                                               Managing Principal
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider with more than 3,800 professionals in                                     7700 Forsyth Boulevard
                                                                                                                                               9th Floor
more than 60 offices nationwide. Based in Washington, DC, the company represents a wide range of clients—
                                                                                                                                               St. Louis, Missouri 63105
from small businesses to Fortune 500 companies, from local non-profits to major institutions. The firm                                         Tel: 314.746.0326
completed transactions valued at $22 billion in 2012, manages approximately 400 million square feet on                                         Fax: 314.862.1648
behalf of institutional, corporate and private clients and supports more than 23,000 domestic corporate                                        Email:
services locations. Cassidy Turley serves owners, investors and tenants with a full spectrum of integrated                                     The information contained within this report is
                                                                                                                                               gathered from multiple sources considered to be
commercial real estate services—including capital markets, tenant representation, corporate services, project
                                                                                                                                               reliable. The information may contain errors or
leasing, property management, project and development services, and research and consulting. Cassidy                                           omissions and is presented without any warranty
                                                                                                                                               or representations as to its accuracy.
Turley enhances its global service delivery outside North America through a partnership with GVA, giving
clients access to commercial real estate professionals in 65 international markets. Please visit                                               Copyright © 2013 Cassidy Turley.
                                                                                                                                               All rights reserved. for more information about Cassidy Turley.

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