30% of U.S. office buildings, valued at $1.1T, are obsolete

[Steely Dan]

Originally Posted by mhays

DTSL and Clayton put together are still a pretty small percentage of the metro office market per numbers I looked up a while back. Even the entire combined central corridor wasn't that high. It's a very suburbanized office market.

Sure, that might well be the case.

But even then, whatever market there is for commercial office development in a more urban setting seems to be entirely soaked up by downtown Clayton these days, much to the continued detriment of downtown St. Louis.

[mhays]

No doubt.

Actually it's similar here in Seattle. DT Bellevue (a mega-Clayton) is booming with offices while Downtown Seattle's office market has stagnated.

[LAsam]

It's interesting having essentially two downtowns rivaling each other in such close proximity. The advantages Clayton seems to have is that it's the county seat (which is strange to me that STL isn't this) and that it's in an affluent area. The advantages STL seems to have are that it has the convention center, sports venues, and cultural attractions. Obviously, there isn't enough demand for office in metro STL to support both Clayton and STL. STL seems to have not been able to adapt and find ways to compete with Clayton for office tenants.

[LAsam]

Originally Posted by mhays

No doubt.

Actually it's similar here in Seattle. DT Bellevue (a mega-Clayton) is booming with offices while Downtown Seattle's office market has stagnated.

Agree that Seattle has a similar dynamic with it's DT and Bellevue. DT Seattle has been bolstered by all the Amazon development in South Lake Union, though. DTSL doesn't seem to have a similar anchor.

Los Angeles is probably the king of competing downtowns. We have DTLA, Pasadena, Glendale, Burbank, Century City, Culver City, Santa Monica, etc... it's a constant tug-a-war (with DTLA struggling the most as of late).

[Steely Dan]

Originally Posted by LAsam

. The advantages Clayton seems to have is that it's the county seat (which is strange to me that STL isn't this)

St. Louis City unwisely divorced itself from St. Louis County back in 19th century to become an independent city, unaware of the mass suburbanization that would come in the 20th.

So left without a county seat, what remained of St. Louis County chose Clayton as the new county seat.

That divorce is another complicating part of the problem.

[badrunner]

Originally Posted by UrbanImpact

Macy's also closed their downtown Miami store in 2018 (formerly Burdines).

The last urban location in Florida is the South Beach location:
https://maps.app.goo.gl/KXqukpCnoMMcjy7N8

I'm surprised there are still standalone departments stores hanging around. I remember going to some of them in the 90s and thinking they were dinosaurs even back then.

[The North One]

Originally Posted by Crawford

The Penobscot Building, the third tallest building in Detroit (I guess 4th shortly) is more or less vacant/almost worthless largely due to no accessory parking.

Even in a revitalized core Detroit, nothing works without massive attached (or at least extremely convenient) parking. It really is disgusting how we completely turned over the U.S. built-environment to vehicles. Totally dystopian.

The Penobscot building's misuse is mainly due to slumlord speculative owners who aren't willing to put a dime into the building and refuse to sell. Not really about parking issues. It's also a pre-war so makes little sense for modern office use. There have been many major residential conversions downtown with no dedicated parking, like the David Stott building.

[Crawford]

Is Clayton really that big? It also isn't particularly urban. More like an urban-suburban hybrid, like comparing Arlington to Downtown DC, Stamford to Manhattan, or Century City to Downtown LA. It does seem really successful for office use relative to downtown STL, but I don't think it's obvious that the two can't prosper simultaneously.

Can anyone repost the job sprawl studies? The ones where they have % of jobs in CBD by MSA?

[Steely Dan]

Originally Posted by Crawford

Is Clayton really that big? It also isn't particularly urban.

Compared to most other Midwest suburban office tower nodes (Southfield, Schaumburg, Bloomington), Clayton is quite urban.

And the issue here isn't so much about size as it is competition.

Downtown St. Louis hasn't built a significant class A building in over 30 years now. Meanwhile, Clayton has built half a dozen of them.

Clayton is winning.

[LAsam]

Originally Posted by Steely Dan

Downtown St. Louis hasn't built a significant class A building in over 30 years now. Meanwhile, Clayton has built half a dozen of them.

Looking at the StreetView for Clayton, you can even see a large new office building that was under construction as of April 2022 at Forsyth between Brentwood and Meramec. Judging by the satellite view, that building was completed since then. It's just a shame that it seems to be a zero sum game between Clayton and DTSL.

[mhays]

It's not a zero-sum game. Some tenants probably choose Clayton that might otherwise do a sprawlier place. Probably a lot.

[Crawford]

Originally Posted by mhays

It's not a zero-sum game. Some tenants probably choose Clayton that might otherwise do a sprawlier place. Probably a lot.

Right. I'm not disputing that downtown STL office market is crap, I'm just skeptical that Clayton's presence is some magical kryptonite that permanently prevents downtown STL from being anything other than crap.

Clayton has apparently been an important node for generations. It was getting downtown retail anchors in the 1940's already. STL didn't have this extreme level of core distress until very recently. The office building that just sold for $3.5 million sold for $205 million in 2006.

[Steely Dan]

Originally Posted by mhays

It's not a zero-sum game. Some tenants probably choose Clayton that might otherwise do a sprawlier place. Probably a lot.

Yeah, not exactly zero sum.

But as stated before, to whatever extent there is a market for new class A commercial office space in an urban setting within metro St. Louis, downtown Clayton has being seeing ALL of that action for the past 25 years or so.

If I'm the city of St. Louis, I'm not happy about that fact.

[Wigs]

Originally Posted by Steely Dan

St. Louis City unwisely divorced itself from St. Louis County back in 19th century to become an independent city, unaware of the mass suburbanization that would come in the 20th.

So left without a county seat, what remained of St. Louis County chose Clayton as the new county seat.

That divorce is another complicating part of the problem.

Oh man, I can only imagine if that happened in Buffalo (city pop ~280k). Amherst (pop. 131k) would have an actual secondary downtown and downtown Buffalo would look like Erie or a smaller Akron or something

The other day I watched a video on Milwaukee from a travel YouTuber and she stated that downtown/inner city Milwaukee felt much more active and vibrant in one afternoon than her entire 2 days in St. Louis she had visited prior.

I looked up the Metro populations. You can literally move the entire Buffalo-Niagara MSA (<1.2M) to Milwaukee MSA (<1.6M) and it would still be tens of thousands less population than St. Louis MSA (2.8M). Crazy difference in size.

At the rate the city of St. Louis is still declining, it's entirely possible the city of Buffalo will surpass it in population by the 2030 census unless things change.

I thought the city proper had been on the rebound but I guess it's only certain neighborhoods benefiting

[Wigs]

Source: Colliers
https://www.colliers.com/en/research...-market-report

Clayton has 9.73 million sq ft office space
Downtown has 10 million sq ft

The suburbs have a serious power imbalance for office space/jobs

[meh]

Originally Posted by mhays

It's not a zero-sum game. Some tenants probably choose Clayton that might otherwise do a sprawlier place. Probably a lot.

Sure, it's better than those jobs ending up in West County or St. Charles, but DTSTL absolutely loses in terms of tax revenue, corporate infrastructure spending, and long-term reputational damage.

[meh]

Originally Posted by Wigs

At the rate the city of St. Louis is still declining, it's entirely possible the city of Buffalo will surpass it in population by the 2030 census unless things change.

I thought the city proper had been on the rebound but I guess it's only certain neighborhoods benefiting

The rate has dramatically slowed, and the continued loses are due to Black flight from North St. Louis. The Central Corridor is thriving and South City is stable, with a number of South Side neighborhoods building significant amounts of new housing. At some point the Central/South growth is going to overtake the North loses. Additionally, there's a substantial amount of geospatial investment in the works around the new $2B National Geospatial-Intelligence Agency facility in near North, which will open in 2026. And Washington University is now investing heavily in the West End neighborhood—just above Forest Park north of Delmar Blvd—after reviving the Forest Park Southeast Neighborhood. It's only a matter of time before that neighborhood follows the same trajectory.

[meh]

Originally Posted by Steely Dan

Anyway, back to St. Louis, I think the piece you may be missing here is specifically about major commercial office development in secondary urban nodes.

Yeah, many cities have significant eds/meds/culture centers in secondary urban nodes, but Clayton is a bit different in that it also brings significant office development into the equation too.

Thanks for making this point. I was going to say something similar. St. Louis' analogy to University Circle, Oakland, etc. is the Central West End. Clayton is a second concentrated corporate office market. To my knowledge, none of the other rust belt cities discussed have an analogous municipality so close to their primary DT office markets.

[The North One]

Pretty much agree that Clayton is the main problem. Maybe when metro STL was healthier they were able to coexist. But Clayton is clearly the parasite here (aside from suburban office sprawl in general). If there was an effort to direct resources to downtown and not Clayton the situation would be much different.

The trend of the last couple of decades are that Midwest city downtown's have gotten exponentially better. It is very odd that downtown STL seemed to have went in the opposite direction as recently as 2013.

I also had no idea that behemoth of a building that is the railway exchange is also vacant. That hotel on the riverfront is vacant too. Really hard to paint a rosy picture of downtown STL. Things are indeed bad, but there's still time to fix it.

[Steely Dan]

Originally Posted by meh

To my knowledge, none of the other rust belt cities discussed have an analogous municipality so close to their primary DT office markets.

Yeah, I can't think of too many other rustbelt suburban municipalities with their own urban, rail transit accessible, office highrise downtowns.

Evanston sorta, but it's not very "office-y", it's way further out, it's not at all centrally located within its metro area, and is absolutely miniscule potatoes compared to the loop in terms of office space.