Sealy & Co. renews 1.6M SF lease with World Wide Technology in Edwardsville

Sealy & Co. has secured a lease renewal for two buildings with World Wide Technology (WWT) at Lakeview Commerce Center II and III in Edwardsville, Ill., covering in excess of 1.6 million SF. WWT, the company’s largest tenant, has maintained a long-term relationship with Sealy.

Lakeview Commerce Center II, located at 3971 Lakeview Corporate Dr., comprises 539,877 SF and includes a variety of enhancements. The facility, which was delivered in 2006, features 29,900 SF of office and laboratory space, T5 specialty lighting, and generators for emergency backup.

Lakeview Commerce Center III, a distribution center located next door, encompasses the bulk of the square footage with 1,109,830 SF. Originally completed in 2008, it was expanded in 2015 to add more office space, custom trailer stalls, and enhanced security measures. This building also recently earned the BOMA 360 designation for its high standards in energy efficiency, safety, security, and tenant relations.

Both properties are ideally located in the Metro East industrial submarket of St. Louis, just west of Hwy. 111, with direct access to I-270 and downtown St. Louis only 20 miles down the road.

Negotiations for the renewal were led by Sealy’s Regional Director William Shagets, with support from Cushman & Wakefield’s Ed Lampitt and Matt Eastin.

The St. Louis industrial market continues to see strong leasing activity through the third quarter of 2024 with a vacancy rate of 4.7%, according to a CBRE report (St. Louis Industrial Figures Q3 2024). Leasing activity surpassed 1.2 million SF, up 24% from the previous quarter. While the Metro East submarket had the second-highest vacancy rate in the area just under 10%, it led the region in leasing activity with 414,000 SF for the quarter.

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Header image: Lakeview Commerce Center puchased by Sealy & Co. in 2020 is located just 20 miles from downtown St. Louis in Edwardsville, Ill. Image courtesy of St. Louis Regional Freightway

Innovation and customer experience key to St. Louis commercial real estate growth in 2023

More than 100 industry professionals attended MetroWire Media's 2023 Market Forecast Summit on March 9, 2023 at the Lodge Des Peres, which featured networking and a panel discussion with Addie Bunting from Wies Offsite as the moderator, and panelists Lauren Talley with Cobalt Construction Consulting, Tom Ray with CBRE, Tom Kaiman with Mia Rose Holdings, and Kyle Wilson with Kadean Construction. The panelists covered a range of CRE topics related to multifamily housing, office, industrial, and retail real estate.

Here are some highlights from the session:

Impact of the new Citypark Soccer Stadium

Kaiman: “It’s a great addition to the city that will spur other development in the area. Quality developments will bring people back to town. It will be an exciting place to live. The Taylor family is doing a great thing with this investment in the city.”

Talley: “It is exciting to see midtown coming to life,” said Talley. “Out-of-town developers are coming in.”

Multifamily

Kaiman: “Multifamily has been undersupplied for decades; zoning, permitting and NIMBY continue to be problematic. A lot of new product is coming online in St. Charles County.”

Wilson: “We continue to see a lot more interest in multifamily and condo properties for sale among empty nesters in Kirkwood, Webster Groves and Clayton. Small projects seem to infill well.”

Ray: “Apartments will fix downtown. The answer is more apartments. It’s more important than ever that people can live in walking distance of their offices.”

Talley: “Multifamily has exploded. The result is a flight to quality while commercial is seeing a flight to amenities.”

Office

Ray: “Downtown is seeing a nice absorption in startup and early-stage businesses looking for office space needing little improvement. Landlords are ready to deal. There’s an historic view that the prime downtown tenant is a large law firm that will stay forever, but smaller startup companies are the future. There’s a lot of leasing as companies look for smaller office space.”

Kaiman: “There’s no longer a playbook or one size fits all. We’re still trying to figure it out. The world will continue to evolve in how we work, how we live, how we play.”

Retail

Kaiman: “Development fits everywhere. It’s all about how you activate a site and bring people there. It has to be safe. Cities that keep an open mind will benefit. The economic development folks have to be out there recruiting for new businesses.”

Wilson: “Store chains are taking a new approach, adding a smoothie bar, clothing for sale, etc., to create a new experience.”

Ray: “Mixed use is a goldmine for commercial/retail. It’s completely based on walkability.”

Talley: “Mixed use is kind of the ‘new black,’ and jurisdictions are mandating it. I think it’s here to stay. We need to grow to be more welcoming to national chains.”

Cannabis

Kaiman: “It’s the best thing that ever happened to empty stores. Data also shows property values going up around dispensaries.”

Industrial

Wilson: “We’re finding more mega-sites — they seem to be bigger and bigger. Tenants who need smaller space might be left in the dust. Big is booming.”

Talley: “We have the land available (that companies need for large industrial uses). Cost increases for materials and supplies led to a pause. Products delivered to the home with continue to grow (and require large warehouse and distribution facilities). Companies are looking to automation because it offers less human error or possibilities of people getting hurt — all industries are increasing automation.”

Wilson: “Automation has much higher construction requirements, so we’ll see taller buildings. If it gets traction, it will change the way we build warehouses.”

What Clients Want

Kaiman: “Our customers are tenants, so the flight to quality is their number-one driver.”

Wilson: “Our biggest challenge is being asked for more product. The subcontractor market is overloaded — they need more workers.”

Ray: “The collective experience in the office sector is adding more amenities. A new building has to be different from the one next door. You have to figure out how to provide experiences.”

Talley: “Clients want transparency in everything — costs, where products are coming from, when items will arrive, whether prices will be the same on arrival.”

Overall, the panel was optimistic about the future of commercial real estate in St. Louis, highlighting the potential for growth and expansion across all four sectors. They emphasized the importance of providing customers with unique experiences, as well as the need for economic development teams to recruit new businesses to the area.

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CLICK HERE TO VIEW EVENT PHOTO ALBUM.

Vision for greatness ahead for St. Louis

St. Louis commercial real estate should be headed for great things in 2021, judging by insights provided in “Greater St. Louis and a Vision for Greatness,” a March 9 Retail Spotlight Shift webinar from the St. Louis CCIM chapter.

Tiffany Wiegers, 2021 president of CCIM STL, kicked off the event by thanking sponsors as critical to providing services and resources for the chapter and announcing that scholarships are available for upcoming courses (details are on the CCIM STL website).

Events hosts were Tony Kennedy of Colliers International and Tom Ray of CBRE.

“This is a timely and important discussion about the future of our region,” said Greater St. Louis, Inc. founder and CEO Jason R. Hall, in describing Greater St. Louis Inc. as a combination of five organizations (AllianceSTL, Arch to Park, Civic Progress, Downtown STL, Inc. and the St. Louis Regional Chamber) aiming to reduce historic fragmentation and create one united voice.

“We have to make a decision that we will be a community on the rise or on the decline. We need the same vision, same tenacity, same energy (as in the sports sector) to grow the region.”

“Greater St. Louis brought together eight key growth initiatives from day 1 (January 1, 2021),” Hall said. “It’s all about jobs — retain, attract and create; elevate our regional reputation; and advance common goals. The urban core is essential.”

Among the positive indicators,  St. Louis has seen $8 million in commercial real estate during the pandemic.

“And that has continued to grow. St. Louis can be a global leader in biotech and agtech,” Hall said.

An important example is the 1,400 new jobs coming with Accenture. Other encouraging signs are redevelopment of the Butler Building, which has been one of downtown’s largest vacant buildings, and Green Street Workforce Housing, a partnership for “one of the largest inclusive housing projects in The Grove.

Such place-making projects have a huge impact on bringing business and residential growth to St. Louis.

“We are coming together as a geospatial center of excellence, with a long-term plan in place,” Hall added.

Hall cited entrepreneurship as another incredible force in being re-energized.

“St. Louis is launching new businesses and is first in the country for women-owned businesses,” he said. “We are aggressively back in business.”

Hall quoted Entrepreneur magazine as recently saying that “St. Louis is on the precipice of leading the United States in 21st-century innovation.”

While the St. Louis area hasn’t had a basic jobs plan for more than a decade, “we are now the only metro area to develop one in terms of the pandemic and the new civil rights movement,” Hall said.

“We have to drive inclusive growth. We have got to focus on inclusive growth and close spatial and racial gaps.”

Greater St. Louis is funded by private sector business as investors, and “the business community has to be much more engaged to make (our vision) a reality,” Hall noted.

“We have to make St. Louis better overall and understand the perception of St. Louis in the country. We started STLMade as a way to shine a light on the positive and tell our own story. We will take the story national. It’s a people-centered, data-driven approach.” 

In line with such efforts, the AllianceSTL partnership aims to “accelerate growth by recruiting new jobs and business investments to the 15-county bistate St. Louis region,” according to Chief Business Attraction Officer and president Steven S. Johnson.

“We have an exclusive external focus on business and economic development,” he said. “Our key audiences are site selectors, real estate developers and companies in our main targeted verticals: manufacturing and production; financial and information services; bioscience and health technology; geospatial; agtech; transportation and logistics; and the aerospace, automotive and defense industries.”

Many of those targets are in local commercial real estate because of their current work in location services, Johnson noted.

The Alliance is using social media and related advertising along with traditional advertising to those primary key audiences, along with individual outreach and relationship-building. Marketing is essential — a lesson that St. Louis is learning from cities like Austin, Texas. “Many of the markets we admire have been marketing business attraction for decades.”

Typical projects for the Alliance include “straight-up business development to attract companies and headquarters to St. Louis,” which represents 80% of its focus. Such companies are generally new to the area or have no St. Louis presence yet. Cooperation is vital: “We work with economic development partners; we can do nothing by ourselves,” Johnson said.  “Our relationships and partnerships are as strong now as ever, and that is good for St. Louis.”

To build on those connections, “we ask businesses exactly what they’re look for.” The answer is usually “talent availability and sourcing, business continuity, and the cost of labor. “We are finding that location is as much about mitigating risk as anything else,” Johnson said.

Agriculture technology is another important business sector for St. Louis, thanks to its central location and accessibility to a huge resource of agricultural producers, according to Thad Simons, founder and managing director of The Yield and The Yield Lab Institute, a “cooperative network of venture funds to advance food and agriculture technology globally,” with companies in Ireland, Argentina, Brazil, Chile, Singapore, France and Luxembourg.  The lab is the company’s nonprofit arm.

When he came to St. Louis in 2014 for a three-year assignment with Monsanto, “I was curious about the agtech space,” Simons recalled. “I realized the difficulty of getting projects off the ground. Part of the problem was understanding what ‘agtech’ means.”

With agriculture as one of the largest elements of the geospatial sector, the advantage for St. Louis is that it is “right in the center of agricultural production and distribution. The strength we bring is less the money that the connections,” Simons said. “The impact of the agriculture sector on St. Louis is tremendous.”

While many large organizations already have a local presence — the largest associations for farmers are all based in St. Louis, “we mentor smaller companies to come to St. Louis.” There is still a need to “find champions of St. Louis and stay in touch with them,” Simons said. He is encouraged by the expectation that “there will be lots of stories of companies coming here through word of mouth.”

Simons sees St. Louis as a “really hot space” that is “fostering research and technology.” Of the company’s 50 global projects, 12 are in St. Louis. Driving new investment and presence in the area are projects and innovations that go beyond traditional uses of agricultural products, such as a commercially viable indoor farm and “a small-scale project along Delmar to address food deserts” (the absence of grocery stores). “It’s intended to be for-profit, so we will sell products to restaurants, but also donate to the community,” he said.

Now getting started in St. Louis is a NASA Challenge to investigate “how growing food in space can relate to growing food on Earth,” Simons added.

While Simons is optimistic about business growth, he sees a need for expanded investment. “St. Louis is strong and getting stronger in human capital, but still not where we should be in financial capital,” he said. 

The hemp industry offers the prospect of growth as an alternative protein and in oils and nutrition, once regulation and legality are in place.

Looking ahead

For St. Louis business and commercial real estate to succeed, it is crucial “to be thinking five, 10, 20 years ahead to create self-perpetuating environment in geospatial and build up an innovation ecosystem,” said Hall. “That will give St. Louis a durable advantage.”

Asked about the impact of a new mayor on commercial real estate and business, Hall said the upcoming mayoral election is a “generational change; both candidates are speaking about growth  and the need for inclusional growth. It’s an exciting time for St. Louis. Magic happens when we have public and private alignment. There will be exciting opportunities to work together.”

“We seem to have two candidates who will be very hands-on and pro-development. We will work with everybody,” Johnson said.

“Whoever becomes mayor will have to realize that there is an urban-rural divide, and a need for much better understanding between those segments of the region,” Simons said.

A recording of the event is available at https://www.linkedin.com/company/ccim-st-louis-metro-chapter/ or

https://www.youtube.com/channel/UCO2uJM-RnLRetiKTNvYAUVA.