St. Louis Multifamily Report – Summer 2019
Household creation continued at a healthy pace throughout the metro in the first five months of 2019, boosting multifamily demand and paving the way for rent growth.
St. Louis rent evolution, click to enlarge
A former industrial hub, St. Louis is no duster, building on its past economic strength while tapping into new industries that can employ a diverse workforce, including tech talent. And while the metro’s population growth may be stagnant, household creation continues at a healthy pace, boosting multifamily demand and generating upside potential for additional rent growth.
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Manufacturing led employment gains in the 12 months ending in March, with the addition of 4,200 jobs. Education and health services, which gained 2,800 positions, is set to expand further, as new developments become operational, including SSM Health Saint Louis University Hospital, a $550 million academic center scheduled to open in 2020. Meanwhile, the National Geospatial Intelligence Agency is building a $1.8 billion headquarters in North St. Louis.
St. Louis sales volume and number of properties sold, click to enlarge
Drawn by the metro’s high yields compared to primary markets, investors traded $791 million in assets in 2018, a cycle high. And despite a slow start to 2019, sales are expected to pick up in the second part of the year. Developers completed 1,885 units in 2018 and an additional 3,500 apartments were underway as of May. With absorption bound to keep up, we expect the average St. Louis rent to advance 2.3 percent this year.
