Venture capital opportunities are thriving in the St. Louis real estate community, resulting in a positive impact on the economic health of the area.
That’s the word from presenters at a CCIM-St. Louis luncheon featuring insights from Gabe Angieri, executive director, Arch Grants; John True, general partner, Cultivation Capital; and Sam Fiorello, president & CEO, Cortex Innovation Community.
The region’s venture capital resources support a lively start-up vibe and play a role in whether new companies remain in St. Louis as they grow and prosper. Economic growth through venture capital generates opportunities for commercial real estate interests in St. Louis, speakers agreed, by creating demand for office, warehouse and storage, and laboratory space.
“Arch Grants are building an economic ‘nesting’ environment to attract and retain talent and companies, from start-ups to a comprehensive wraparound approach,” Angieri said. “We usually give 15 to 30 grants a year. This year, we are giving 22 or 23 companies $50,000 each and $25,000 for relocation expenses.”
According to True, “The early-stage start-up ecosystem has evolved quite a bit in recent years — St. Louis currently ranks fifth in the Midwest and activity will have tripled over the last three years.” The city is also considered one of the top 10 best-growing in the USA, he added.
“We are getting a lot better at bringing next-generation jobs to the region,” True said. “Sources of capital are becoming a lot more democratized. The real positives are in civic initiatives, such as the geospatial arena.”
Four years ago, there were three such companies in St. Louis; now there are 90. He cited the NGA campus as the first time the public-private-academic communities came together for such a project.
“Geospatial is ubiquitous and will be the real driver (of further growth)”, he said.
Calling Cortex “vibrant and inclusive” as it celebrates its 20th anniversary this year, Fiorello said it expects to encompass 400 companies, 200 acres of property, 4 million developed SF and 6,000 employees by 2023.
The focus is on technology in the life sciences, which creates demand for lab space, and, most recently, cybersecurity, with various local initiatives underway to train needed staff who can step into jobs without spending four or more years in college.
Fiorello cited statistics saying there are 10,000 unfilled cyber jobs, pushing Cortex to work with local cyber companies to train and fill those positions, including with candidates of varied identities as companies look at being more diverse.
“Start-ups don’t have the time for a lot of handholding of younger employees,” Angieri noted. “It’s an intensive period, and they need experienced people.”
“We have to figure out what St. Louis can do best and focus on that,” Fiorello said. That means leveraging the St. Louis area’s “unique strengths” in medical, science, technology and educational resources to bring new entities and their employees to town: “We’re punching way above our weight class.”
Challenges include continuing to respond to the changes caused by Covid.
“We’re still trying to figure out what the work world will look like — we have to create work-from-home–proof space,” Fiorello said. “I expect secure conference space to be booked 365 days a year. We’re also competing for talent (with other employers from) all over the world.”
While the pandemic did create significant chaos, it did offer some benefits.
“People are staying in St. Louis to work, while funders outside St. Louis are more willing to look farther afield for start-ups to support,” True said. “We’re also starting to see better configurations of office space for hybrid uses.”
True urged CRE colleagues to “stay tight” on office space.
Arch Grants gets constant requests for more space, Angieri said, which means opportunities for CRE professionals and services.
“We’re starting to see a flywheel effect, where one company follows another here,” said Angieri.
Brown & James, P.C. law firm sponsored the event, joining more than a dozen area companies that support CCIM services and programming.
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Feature photo credit: MWM STL