St. Louis Industrial Real Estate Market Q4 2024: Trends & Outlook for 2025
As we close out 2024, the St. Louis industrial real estate market remains strong, with low vacancy rates, increasing leasing activity, and steady demand for industrial space. With national economic shifts impacting commercial real estate (CRE), how does St. Louis compare? The latest NAI DESCO Industrial Market Report reveals key insights on vacancy rates, lease trends, and investment opportunities heading into 2025. Whether you’re an investor, tenant, or property owner, understanding these trends will help you navigate the CRE landscape.
Current State of St. Louis Industrial Real Estate
1. Vacancy Rates Remain Low, Outpacing National Averages
At the end of Q4 2024, St. Louis recorded a 4.3% industrial vacancy rate, which is significantly lower than the national average of 6.8%. Compared to Q3, vacancy declined by 10 basis points, demonstrating strong absorption of available industrial space.
Top-Performing Submarkets:
- Metro East & Earth City led leasing activity, with high demand for warehouse and distribution centers.
- North County had the highest vacancy rate (13.6%), presenting opportunities for new tenants looking for competitive lease terms.
What This Means for Investors & Tenants:
- Investors should note that low vacancy rates drive property appreciation and strong lease renewals.
- Tenants looking to secure industrial space should act quickly before rates increase due to demand.
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2. Industrial Leasing & Net Absorption Surge
St. Louis recorded 2.29 million square feet of net absorption in 2024, a 42.3% increase from 2023. Q4 alone saw 3.67 million square feet of leasing activity, nearly tripling the previous quarter’s volume. Key Lease Transactions in Q4:
- Armstrong Logistics leased 487,521 SF in Metro East
- Marson Food signed a 211,269 SF lease in North County
- Prestige Consumer Healthcare secured 195,329 SF in North County What This Means for CRE Professionals:
- Higher demand for warehouse space is creating more competition for prime locations.
- Industrial lease rates may rise in 2025, especially in high-demand submarkets.
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3. Construction Pipeline: New Projects on the Horizon
While no new industrial projects broke ground in Q4, developers remain active. 3.3 million square feet of industrial space is under construction, with major projects scheduled for completion in 2025. Largest Industrial Developments in St. Louis:
- Boeing’s 1.1M SF Advanced Combat Air Facility (Airport submarket)
- Davidson Logistics’ 350,000 SF facility (North County) • River Valley Logistics’ 300,000 SF distribution center (Chesterfield/Hwy-40) Market Trends to Watch:
- St. Louis’ construction pipeline is below the national average (1.1% vs. 1.6%), which may keep vacancy rates low.
- Investors should monitor build-to-suit opportunities as demand remains steady.
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4. Industrial Lease Rates & Investment Sales
The average asking lease rate (NNN) in St. Louis declined to $6.04 per SF, reflecting a 4.9% year-over-year drop. Meanwhile, industrial property sales surged in Q4, totaling $163.9 million, an 88.6% increase from Q3. What This Means for Investors & Owners:
- Lower lease rates may be a short-term opportunity for tenants before potential increases in 2025.
- Strong sales activity signals confidence in the St. Louis industrial market, making it an attractive investment option.
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What to Expect in 2025 for St. Louis Industrial Real Estate
Looking ahead, expect continued demand for industrial space, driven by:
- Growth in e-commerce and logistics
- Increasing investment in warehouse and distribution hubs
- Tightened supply due to low new construction starts
Thinking about leasing, buying, or investing in St. Louis industrial real estate?
Contact NAI DESCO today for expert guidance and market insights!
View our full Q1 Industrial Marketing Report Here.