St. Charles County has historically
been in the shadows of St. Louis
County, but it’s blossomed into a booming entity, as a result of ranking in
the top 2 percent in growth among all U.S.
counties during much of the last decade.
Several factors created this growth,
including strong, pro-business communities, abundant educational opportunities,
availability of high-quality jobs, a well-qualified work force, reasonable land
prices and infrastructure improvements
that have kept pace with growth.
For those businesses seeking office or
industrial space, a St. Charles address
can provide a significant property tax
break — up to 30 percent compared to St.
Louis County. And, two of Colliers Turley
Martin Tucker’s vice presidents — Mike
Statter, CCIM, who specializes in St.
Charles’ industrial market, and Keith
Schneider, CCIM, SIOR, who specializes
in St. Charles’ office market — expect the
market to continue its strong growth.
“If you consider that the population of
St. Charles county is expected to be
450,000 by 2020 — roughly half the population of St. Louis County today — businesses will be missing out on the opportunity to benefit from an excellent work
force and establish a presence in a county that stands on its own,” Statter says.
“If you want to take advantage, now is
the time.”
Smart Business spoke with Statter and
Schneider about St. Charles County and
why it’s such a hot commodity in today’s
market.
What’s behind the county’s growth, and how
long will it continue?
It started as residential growth, with
the county’s population growing 853 percent between 1950 and 2000. This strong
residential growth fostered commercial
growth, which created a strong tax base,
which funded the infrastructure. The
enhanced infrastructure has facilitated
continued residential and commercial
growth. This self-perpetuating cycle is
expected to continue well into the
future.
Have prices risen?
The trend for prices in just about every
product type has increased steadily. We
haven’t seen the significant peaks and valleys that occur elsewhere. We are seeing
some flat-lining in land right now, but as
far as industrial and office products,
there’s still steady, moderate increases.
What is the market like for office space?
All the growth factors mentioned, and
most importantly the skilled labor pool,
have fueled rapid, phenomenal office
development. Large office campus users,
such as CitiMortgage and MasterCard,
moved their corporate offices to St.
Charles County to be closer to where the
bulk of their employees lived and capitalized on the abundant work force and reasonable land prices. These two users
alone account for more than 1 million
square feet of office space constructed
since 2002. Successes such as these created credibility for St. Charles County as
a player in the metro office market. In
fact, since 2000, St. Charles County
absorbed more office space than all of St.
Louis City and County combined. We predict that in 2008, we’ll see a significant
amount of new speculative office construction. However, as demand and
growth continue, there’s going to be less
land to develop, so rents — which are
generally lower than comparable areas in
St. Louis — may increase.
What is the market like for industrial space?
The St. Charles industrial market finished 2007 with a very healthy vacancy
rate of 3.2 percent, which we believe provides some targeted opportunities for
developers. Our industrial inventory is
only about 25 million square feet, which
represents about 10 percent of the overall
inventory of the metropolitan area. About
8 million square feet of product has been
built here in the last decade, which
accounts for about 25 percent of new
product delivered in the metro area during the same timeframe. Regarding industrial land, there is at present a definitive
lack of large tracts available for development — leaving prospective users with 5
to 10 acre parcels that are available in disparate pockets around the county.
What about property taxes and values?
Compared to St. Louis County, property
taxes are lower in much of St. Charles
County. For example, the Highway 370
area, which is primarily an industrial corridor connecting into St. Louis County,
can have a 30 percent differential in property taxes compared to the nearest industrial parks in nearby St. Louis County.
Meanwhile, rents and asking prices tend
to be higher along the I-64 corridor coming out of Chesterfield Valley versus the
I-70 corridor.
Land is overall somewhat less expensive than St. Louis County, and land values are similar to building values — less
expensive along I-70 corridor versus I-64
corridor. There’s a relatively young age
demographic, a relatively high-income
demographic and high degrees of education, so the St. Charles market is wealthy,
young and smart.
MIKE STATTER, CCIM, and KEITH SCHNEIDER, CCIM, SIOR, are both vice presidents of Colliers Turley Martin Tucker. Reach them
at (636) 949-9797 or [email protected] or [email protected], respectively.