And the office gains were spread out across most of the metropolitan area. Although Cassidy Turley attributed over 80% of the occupancy gains to the West County and Downtown submarkets, suburban Clayton also had 31,000-square-feet of positive absorption, and Mid, North and St. Charles Counties also posted gains. South County was the only submarket that posted negative absorption. The average vacancy rate dropped by a full percentage point to 15.5%.

Furthermore, the regional industrial market strengthened again in the third quarter with 175,000-square-feet of positive absorption, bringing the year to date total to 1.2-million-square feet.

“As of the end of the third quarter, there were less than a dozen modern bulk buildings with more than 100,000-square-feet of contiguous, vacant space available on the market,” says Madlinger. “This is impressive considering that just 18 months ago there were more than 25 of these spaces available.”

And similarly to the office market, solid activity was seen in most industrial submarkets. North County had 345,000-square-feet of net absorption followed by St. Charles County which netted 174,000-square-feet. This marks the fifth straight quarter of occupancy growth for the industrial sector, leaving vacancy at 8.1%. “At this level, the risk associated with speculative development drastically decreases,” the researchers note, “setting the stage for new construction to begin.”

The region's manufacturing sector, however, has undergone a painful transition, and Cassidy Turley believes “any growth will likely come from the financial, healthcare and high-tech industries.”

But “the St. Louis region's rate of job growth hovers below the national average and is not expected to improve over the near term. Similarly, income growth is stagnant as long stretches of unemployment drive more people out of the labor force. Hit hard by the recession and faced with a rapidly evolving manufacturing sector, St. Louis is still an economy on the mend.”