Amid 15 percent vacancy rate, is new downtown office building ne - KMOV.com

Amid 15 percent vacancy rate, is new downtown office building needed?

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Rendering of Ballpark Village Phase 2 (Credit: Ballpark Village) Rendering of Ballpark Village Phase 2 (Credit: Ballpark Village)

ST. LOUIS, Mo. (KMOV.com) -- Phase two of Ballpark Village includes a proposed "Class A" office space, the first such office building that would be built in downtown St. Louis since 1989.

Realtors will tell you the downtown office market is considered "soft" with a high vacancy rate because of a lot of building are old and obsolete. Currently, the downtown business district has a vacancy rate of 15 percent; under 10 percent is considered healthy.

By comparison, Clayton's vacancy rate stands at 5 percent. Downtown currently has more than one million square feet of Class A vacancy. Clayton's rental rate for office space is also noticeably higher.

A Class A office building means the space is energy efficient, has modern elevators and HVAC system, as well as wiring for today's computers and energy needs.

"I don't think it's going to have a negative effect," explained Jeff Altvater, with Hilliker Corporation, a commercial real estate agency. "I think it's going to draw new businesses to the area because it's a different product.  Nothing like this product exists currently in the downtown market."

Altaver added some of the older buildings that are Class B and Class C may eventually be turned into more loft apartments or condominiums.

"Quite frankly, a development like this by drawing the business down there and the employees may create the opportunity for some of these Class B and C office buildings to convert them to residential and supply the residence the millennials that will be working in these buildings will need," Altaver said.

Construction is schedule to get underway during the latter half of 2017. Parts of it will be open in 2018 and the entire phase two should be finished by 2019.

Copyright 2016 KMOV (Meredith Corporation). All rights reserved.

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