St. Louis riverfront set for major redevelopment with $1.2 billion Gateway South project

Cushman & Wakefield has been tapped by St. Louis-based Good Developments Group to market the industrial segment of Gateway South, a sweeping $1.2 billion redevelopment initiative aimed at revitalizing 100 acres along St. Louis' riverfront. The master-planned district, envisioned as a hub for innovation in construction and design, seeks to attract industry leaders through ownership, leasing, and build-to-suit options. The project is slated for a 2025 launch.

Executive Director Tripp Hardin, SIOR, and Director Keith Ziercher, CCIM, from Cushman & Wakefield, will lead outreach efforts for Gateway South, emphasizing the site’s logistics advantages and its unique positioning in the heart of St. Louis. Strategically located just south of the Gateway Arch National Park, this historic site was once a bustling industrial and trade zone, thanks to its proximity to the Mississippi River and central geography. Today, it remains ideal for diverse industrial applications, offering multimodal logistics access via river, road, and rail, plus attractive economic incentives.

The development’s vision is to create a dynamic, integrated district where the city’s existing strength in construction and advanced manufacturing can flourish. St. Louis already boasts a high per-capita concentration of talent in these sectors and the area’s affordability and quality of life position it to attract new talent while retaining its workforce. By clustering industrial, commercial, and residential spaces, Gateway South aims to foster an innovative ecosystem where collaboration across sectors can drive efficiencies and sustainability solutions critical to meeting both housing and environmental needs.

The partnership between Good Developments Group and Cushman & Wakefield combines local insight with a global platform, aiming to draw prominent manufacturers and suppliers in the building industry. This effort not only positions Gateway South as a transformative asset for the downtown riverfront but also as a catalyst for economic growth throughout the St. Louis region.

---

Header image: A rendering of Good Developments Group’s $1.2 billion project to redevelop approximately 100 acres on the St. Louis riverfront. Image courtesy of Cushman & Wakefield

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.

---

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

Insatiable appetite for commercial real estate continues

The St. Louis-area CRE market is still hungry for more, according to Commercial Real Estate Women (CREW)-St. Louis’ “Industrial Outlook” panelists.

Christie Brinkman, director, design build, Castle Contracting, LLC, moderated the March session as panelists, Cara Weber, Wakeel Rahman and Christy Campbell discussed recent pandemic-related challenges and predictions going forward.

Cara Weber, vice president, business recruitment, Missouri Partnership, said the Partnership is a public/private entity funded by the State of Missouri’s Department of Economic Development and the Hawthorn Foundation to focus on attracting new businesses to the state by functioning as a sales tunnel that includes marketing, business development and project management.

“Our Raise the Bar program is identifying sites for development so the region can control its own destiny,” Weber said. 

In the past five years, the Partnership has opened 615 projects and lost 142. Wins by industry include advanced manufacturing, energy solutions, food solutions, logistics and distribution, and office-based space.

“Expansion is incredibly important — about 80 percent of new jobs are coming from expansion,” she said. “I’m excited about the level of project flow so far this year, which has been mostly industrial. We’re seeing a lot of searches for existing buildings, but don’t have a lot available.”

“Retention (of businesses) is the key component. Attraction is our wheelhouse,” Weber said. “We’re getting more opportunities from big OEM businesses.”

Available CRE space is a factor in lost projects, along with whether a business has an existing presence in the area and concerns about logistics, incentives, available workforce, business costs and infrastructure, according to Weber. 

“What’s great about Missouri is our transportation resources: rail and river,” she said.

The CRE profession is faced with “trying to meet an almost insatiable demand for commercial real estate,” said Wakeel Rahman, vice president, NorthPoint Development. “The market is very healthy. Retail stepped up to take a lot of space to compete with Amazon.”

E-commerce is driving the market from “just in time” (JIT) to “just in case” (JIC), and the ratio of inventory to sales in the supply chain should increase. 

Rahman warned that national headwinds to watch include continued supply chain delays and cost increases for materials and construction, NIMBYism (Not In My Back Yard) attitudes toward industrial properties, entitlement and permitting, and warehouse fatigue. 

“St. Louis is still one of the tightest markets,” he said. “Looking forward, we will see an increase in automation and more-affordable systems; new geographies where companies can build; and spending more on infrastructure, which means good things for our industry because it creates improved access.”

The preliminary 2022 first-quarter numbers are encouraging, said Christy Campbell, brokerage associate, Cushman & Wakefield: “2.2 MSF of positive net absorption and a 2.9 percent vacancy rate — the lowest ever.” Asking rates are increasing in response, she said. “While St. Louis has always been a stable market, 2021 was a record year and we’re already halfway there in 2022, with 8.3 MSF under construction among 26 buildings with only one that’s tax-abated.”

Royal Canin, Ryder and Imperial Dade are leading the field; Duke Realty has completely left the market. 

The largest Q1 investment sales have been Duke to Exeter Property Group, Inc., TriStar Properties to Apollo Global Management and Duke to Pontegadea Inversiones as cap rates continue to compress.

“Trends are an upward pressure on rental rates and annual increases, changes in marketing strategies with less and less advertised rates, increased emphasis on e-commerce, and the move from JIT to JIC,” Campbell said.

In terms of some of the issues that Rahman noted, “The most common misconception about the industrial sector is negative environmental impact of large facilities on a community; but in reality, there’s no stress on schools, there are new jobs, and LEED buildings with high-tech electronics-driven systems are environmentally friendly,” she said.

“Industrial tenants are looking for buildings with 30- to 40-foot clear heights because of racking and are making heavy trailer parking demands,” Campbell said. “Land prices are increasing across the country, although St. Louis is lagging behind the coasts.” 

Upcoming CREW-STL events include Coffee with CREW, April 1; Membership Hike, April 6; Bar K & Green Street Real Estate Ventures Happy Hour and tour, April 12; and Dine Around, April 19. To register or for more event details, visit https://crewstl.org/events.

Commercial real estate focuses on bounce-back

As pandemic restrictions are lifted throughout the St. Louis area, companies are focusing in on how to return to offices and learn from lessons of the past year and a half.

In a May 19 session hosted by the IFMA St. Louis Chapter, panelists Meghan Graves, human resources manager with PARIC Corporation, and Allison Dionne, lead workplace strategist, Spire, discussed how their businesses are preparing for the newest aspect of the COVID-19 experience. Dave Davis, business developer with Ideal Landscape Group, sponsored the session. Kevin Sullivan of PARIC served as moderator.

Panelists agreed that employees, clients and customers are eager to return to the office, but that doing so requires due diligence about local, state and national guidelines about safety, some of which goes back to how they responded pandemic when the pandemic began.

When it began

For some companies, the pandemic required balancing their own policies with those of some clients. They could send office staff home to work remotely, but still had to provide clients such as healthcare institutions with onsite services. Workarounds included setting up task forces, setting precedents for who would be needed at client locations, and establishing protocols for entering buildings and restricting travel. 

Workarounds included setting up task forces, setting precedents for who would be needed at client locations, and establishing protocols for entering buildings and restricting travel. 

As an essential business, PARIC had to make similar adjustments for its distributed workforce of office and field workers in several states. “There were a lot of working pieces,” said Graves. “We engaged with IT to make sure people could work from home. It was pretty seamless. We were guided by safety. We set up a COVID response team with representatives from all parts of the company to stay on top of challenging guidelines.” Sometimes it seemed as if those guidelines changed from minute to minute. 

Spire also had a varied workforce to manage. “Once we sent everyone home, we still had two service centers up and running that we had to keep safe,” Dionne said. “We developed cross-function teams and safety procedures. Teams had to scramble to respond at all hours and over weekends. Now it’s second nature, although we’re seeing fewer calls.” 

Maintaining morale and recruitment

For these companies, the impact on morale, recruitment and turnover was minimal, primarily because they quickly recognized what employees would need. Spire rolled out emergency leave for field workers who suddenly had school-age children at home. “We’re considering a hybrid approach (now) and are taking into consideration what other companies are doing,” Dionne said. 

Reinforcing the value of work-life balance was one of the few positive takeaways of the pandemic for PARIC.

“We were already well-positioned for balance in our employees’ lives, and added unlimited personal time off,” Graves said. “A financial assistance fund for employees helped morale because they didn’t have to worry about how they would get work done and bills paid. The reality is that it’s hard to work remotely without collaborating and relating to colleagues in person, so we set up virtual coffee talks and happy hours. People now realize they have leverage and are considering different options — they’re choosing us because we have that flexibility, which will continue to be important in the future.

Companies also made a point of praising their workers who were based in medical facilities to support hospital systems and found that the best morale-booster was getting back to normal.

Vaccination policies

None of these companies are mandating that employees be vaccinated as they return to their offices, but all are strongly encouraging doing so. “We’re providing information about efficacy and our leadership’s commitment, which is what we usually do about health issues,” Graves said of PARIC. Plans are for an onsite clinic to make it as convenient for employees to get vaccinated, with the incentive that fully vaccinated employees can take off their masks and stop doing social distancing.

“That will be a big morale boost,” she said.

Spire is among companies providing paid company time as an incentive for employees to get vaccinated and also lets them earn points toward cash rewards at the end of the year. The mask mandate and social distancing restrictions have been lifted. 

For companies whose client sites are in the healthcare sector, staff who don’t have exposure to patients may be able to go maskless. Others have begun incorporating new indoor air quality equipment in their facilities that will probably be a permanent change and plan to increase the workload handled by their plumbing systems.

Changes and impact

Like many area commercial entities, PARIC and Spire are taking the return to the office with care and caution.

“Nothing is finalized yet,” said Dionne. “We’re bringing everyone back slowly, with three days a week in the office and working from home the other two. We’ll continue evaluating that hybrid approach over the summer.”  

“What will change forever is our approach to remote work and flexibility guidelines. We’re taking a hybrid approach as it makes sense for the type of work people are doing. Nothing is set in stone yet,” said Graves. 

The lasting impact of the pandemic is expected to include somewhat reduced workforces overall, more flexibility and work-from-home options, enhanced technology to support new ways of working and communicating, and continued alertness to potential health effects on office and field work.