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.