The fourth quarter 2016 Office Market Report from Newmark Grubb Zimmer highlights two major office construction projects that are expected to get underway in 2017.
Clayco is expected to start developing a new campus for Pfizer in Chesterfield in mid-2017. The 31.8-acre build-to-suit campus will create 460,000-square-feet of research, development, and office space so the pharmaceutical company can consolidate its St. Louis employees in one location and have room to grow. Clayco looks to deliver the $200 million project by April 2020, which is when Pfizer’s lease at the Monsanto Chesterfield Research Center expires.
Clayco is expected to start construction of the $770 million Centene campus expansion in Clayton this month. Phase 1 of the four-phase plan consists of a 660,000-square-foot, 28-story office building with 700 parking, street-level retail, and a bridge connecting the new building to the company’s existing 20-story headquarters building.
Phase 2 consists of a seven-story structure with ground-floor retail, several levels of parking , and 120 apartments.
Phases 1 and 2 are scheduled for completion in 2019.
Phase 3, with a 2020 completion date, is a 21-story tower with 400,000-square-feet of office space on 16 floors topped by 120 units of corporate hotel rooms in five floors.
Preliminary plans for the fourth phase, for which no timeline has been announced, call for a 25-story office building.
Newmark Grubb Zimmer reported that the office vacancy rate in metro St. Louis dropped 240 basis points in 2016, from 13.8 percent to 11.4 percent, and absorbed nearly 1.1 million square feet.
“As 2016 came to a close, the St. Louis market remained one of the top locations for midmarket investments, as both leasing and sales interest remained strong throughout the year and should continue into 2017. New-to-market investors and local real estate entities continue to grow their St. Louis holdings via portfolio sales and key acquisitions of Class A and Class B properties. Redevelopment projects in the urban core will continue in 2017 and will include both the repositioning of office products and the conversion of office properties to mixed-use and residential offerings.”