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Q2 2026

Q2 2026 St. Louis Commercial Real Estate Market Report

Focus: Q2 2026 Market Trends

Executive Summary

The St. Louis commercial real estate (CRE) market is navigating a complex structural rebalancing through the middle of 2026, driven by changing workplace specifications, regional economic adjustments, and a measured delivery pipeline. The Office sector continues to manage elevated vacancy rates as occupiers reduce footprints, though the availability of deeply discounted spaces is starting to narrow. Industrial and logistics fundamentals across the broader metropolitan area remain structurally tight compared to national trends, well-supported by steady demand in distribution networks despite recent negative absorption in certain manufacturing and submarket clusters. Retail remains a stable performer, supported by historically low neighborhood and community center vacancy—particularly in affluent outer residential nodes—and active necessity-led tenant backfilling. Meanwhile, the Multifamily market is entering a healthier operational phase; as peak supply deliveries meet economic tailwinds like major mixed-use investments in Midtown, stable resident fundamentals are supporting a steady rental recovery.

TenantBase Proprietary Data highlights the distribution of active tenant demand over the last 90 days:

• Storefront/Retail dominated localized transaction activity with 53.20% of all searches (108 deals).
• Warehouse was the second most active sector at 31.03% of demand (63 deals).
• Office accounted for 16.26% of total search volume (33 deals).

Office Market

Market Overview

The St. Louis office sector is undergoing a prolonged structural adjustment period in Q2 2026, characterized by elevated vacancy rates and a widening performance gap between premium and commodity space.

• Vacancy & Net Absorption: The market recorded negative net absorption as several large occupiers reduced their physical space, pushing the overall vacancy rate to 15.0%. Vacancy is projected to stay within a tight band between 14.5% and 15.2% through the remainder of the year.
• Private-Sector Resilience: While overall office demand remains soft, tenants maintain significant leverage across most submarkets. Landlords of desirable office assets continue to hold pricing advantages over commodity space, keeping overall average asking rents bounded between $21.40/SF and $22.17/SF.
• Conversions & Key Projects: Large-scale commercial conversions and planned mixed-use adaptations—such as a $3 billion project aimed at transforming the historic Armory into a modern office and data center complex—continue to breathe new vitality into the urban core.

TenantBase Activity

• Demand Share: Office accounted for 16.26% of total search volume (33 deals).
• Lease Term Preference: Local tenant requirements indicate a primary focus on near-term flexible arrangements, led closely by immediate transaction horizons:
  
  • Less than one year: 43.33% of deals (13 deals).
  • 3-5 Years: 23.33% of deals (7 deals).
  • 2-3 Years: 20.00% of deals (6 deals).
  • 1-2 Years: 6.67% of deals (2 deals).
  • 5+ Years: 6.67% of deals (2 deals).
• Size Requirements: Requested floor areas vary sequentially in correlation with transaction duration thresholds. Short-term commitments of less than one year carry a nimble average lower bound requirement of 433.33 SF and an upper bound of 866.67 SF. Standard intermediate 3-5 Year terms require an average lower bound of 1,750.00 SF up to an upper capacity boundary of 3,625.00 SF, while mid-term 2-3 Year commitments request an average lower parameter of 5,000.00 SF and an upper capacity maximum of 7,000.00 SF.

Industrial & Warehouse Market

Market Overview

The St. Louis industrial warehousing landscape continues to operate from a position of relative national strength, successfully maintaining tighter vacancy indices than the broader United States.

• Vacancy & Supply Constraints: Broad industrial vacancy moved to 5.5% up to 6.0%, primarily impacted by notable, large-scale tenant move-outs within the Metro East submarket. Despite this minor softening, regional vacancy remains comfortably below the national average of nearly 7.5%.
• Demand Foundations: Leasing velocity continues to support solid rental rate growth fundamentals, with average direct asking NNN rental rates increasing 3.4% year-over-year to $6.06/SF.
• Pipeline Composition: Speculative supply risks remain heavily mitigated throughout the region. The total active construction pipeline tracks at 3.9 million SF, with an overwhelming 89% of groundbreakings already accounted for as built-to-suit projects.

TenantBase Activity

• Demand Share: Warehouse represented 31.03% of overall search trends (63 deals).
• Lease Term Preference: Mid-market warehouse inquiries show a strong concentration focused across shorter and intermediate commitment curves:
  
  • 1-2 Years: 48.48% of deals (16 deals).
  • 3-5 Years: 24.24% of deals (8 deals).
  • 2-3 Years: 12.12% of deals (4 deals).
  • 5+ Years: 9.09% of deals (3 deals).
  • Less than one year: 6.06% of deals (2 deals).
• Size Requirements: Layout parameters span a wide spectrum based on deployment depth. Highly popular short-term 1-2 Year commitments required an average lower bound of 1,500.00 SF and an upper bound of 5,000.00 SF. Standard intermediate 3-5 Year footprints require an average lower bound of 5,000.00 SF and an upper boundary of 11,500.00 SF, while long-term 5+ Year operations demand the largest physical configurations, averaging a lower parameter of 55,000.00 SF up to an upper capacity threshold of 25,000.00 SF.

Retail Market

Market Overview

Retail is leading regional commercial property sectors in terms of low availability metrics, heavily insulated by grocery-anchored and necessity-based store demand.

• Inventory Balance: Overall availability remains highly stabilized. Shopping center and strip vacancy across the St. Louis metro is firmly insulated within outlying residential areas, where retail vacancy holds near historic lows below 1% across high-income northern suburbs.
• Tenant Realignment: Deal timelines have lengthened slightly as retailers navigate macro issues, frequently leading tenants to demand shorter terms or increased lease flexibility. Active net absorption is increasingly driven by experiential concepts, wellness brands, and value-oriented grocery lines.

TenantBase Activity

• Demand Share: Retail/Storefront activity entirely dominated local market transaction volume, capturing 53.20% of all tracking metrics (108 deals).
• Lease Term Preference: Retail operators demonstrate a clear priority toward intermediate operational stability to capture local neighborhood traffic:
  
  • 1-2 Years: 30.19% of deals (16 deals).
  • 3-5 Years: 24.53% of deals (13 deals).
  • 2-3 Years: 22.64% of deals (12 deals).
  • Less than one year: 11.32% of deals (6 deals).
  • 5+ Years: 11.32% of deals (6 deals).
• Top Locations: Out of the submarkets explicitly tracked, the highest concentrations of local transaction interest centered heavily on St. Louis proper (24 deals), Chesterfield (7 deals), Farmington (5 deals), Fenton (4 deals), and St. Peters (4 deals).

Multifamily Market

Market Overview

The St. Louis multifamily sector continues to showcase immense demographic resilience, maintaining stable occupancy parameters despite a pull-back in quarterly transaction volume.

• Supply & Absorption Rebounds: Property developers delivered close to 2,700 apartment units over the past 12 months, with an additional 4,700 units remaining under active construction. This influx of supply has been successfully met by stable job gains in durable underlying sectors.
• Rent Performance: Average metro vacancies stabilized around 10.6% down to a tight core occupancy baseline. Average advertised asking rents increased 0.3% on a trailing three-month basis to reach $1,344/month, consistently outperforming the slower national rent growth average.

2026 Outlook

Moving through the remainder of 2026, the St. Louis CRE market is positioned for supply-driven stabilization across major property types.

• Office Rebalancing: Landlords are projected to limit major rental reductions, preferring to hold base rents flat while deploying targeted concessions to stabilize occupancy within high-quality assets.
• Industrial Equilibrium: Because the construction pipeline is overwhelmingly dominated by build-to-suit infrastructure rather than speculative big-box builds, the market will easily digest recent vacancies and maintain stable rent growth fundamentals.
• Retail & Multifamily Recovery: Ongoing brand demand within dominant residential corridors will shield shopping centers from deep vacancy corrections. Concurrently, large-scale infrastructure investments in Midtown will bolster central city economic growth, paving the way for sustained multifamily absorption heading into 2027.

Sources

[1] CBRE: St. Louis Office Figures Report - Q1 2026

[2] Cushman & Wakefield: St. Louis Regional CRE MarketBeats

[3] Newmark Zimmer: St. Louis Industrial, Office, & Retail Market Reports

[4] Marcus & Millichap: St. Louis Retail Market Forecast & Sector Review

[5] Yardi Matrix: St. Louis Multifamily Market Report

[6] MMG Real Estate Advisors: St. Louis Regional Economic & Housing Forecast

[7] TenantBase Proprietary Market Data (Dashboard Export: SEO Market Reports st l, July 1, 2026)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.