Building a business in St. Louis is more affordable than you might think.
We all know that real estate isn’t cheap. But when you run a business, there’s more than just the rent to consider — between cost of living and regional tax incentives, location is an important consideration that will impact the long term health of your business.
Luckily for St. Louis natives, our burgeoning city is the perfect place to grow a company — whether it’s in its first year or its twentieth. Although rent’s not free (dream big!), the fiscal benefits available to St. Louis businesses far outweigh any qualms business owners might have around location or demographic. Still, before planning a big move, you’ll want to know precisely what you’re investing in. With that in mind, let’s take a look at the pricing landscape and of St. Louis real estate:
Renting vs. Buying
Despite the rising demand for commercial office space in St. Louis, supply has remained relatively steady. That means now is the time to get in.
As the number of traditional vacancies shrinks, however, new opportunities have emerged. Because St. Louis is a city on the rise, there are fewer limitations on commercial availability within city limits. Adaptive reuse projects offer businesses the chance to convert iconic spaces and transform re-emerging neighborhoods into innovative centers of tech and commerce.
But before you can transform your space, you need to decide whether to rent or buy. Would you rather rent and remain flexible, or buy and build equity? Some startups may simply not have the capital required to make a down payment on a space, in which case renting makes obvious sense. Renting is an excellent option for new businesses looking for space they might grown out of before moving onto the next chapter of their business expansion.
For companies able to afford the hefty downpayment required to purchase corporate space, buying is usually more profitable in the long-term. Owned space builds equity and may be used as collateral for future expansion.
Compared to other cities in the U.S., offices in St. Louis are incredibly affordable. At an average rental rate of $18.80 per square foot (according to 2015 data), St. Louis has the fourth cheapest office market in the country. That’s nearly three times cheaper than the average property in New York City.
Because St. Louis is a secondary market — i.e. a growing city with a population under three million — business owners can enjoy affordability of a small city while taking advantage of an infrastructure geared towards growing industry.
We’ve established that St. Louis costs much less than many of its urban peers. But low cost per square foot is hardly all St. Louis has to offer. Because of its robust infrastructure systems, St. Louis enjoys access to local, national and international markets. The central location offers some of the lowest shipping costs in the country, a strategic position that allows many corporations and small businesses to keep overhead costs low.
St. Louis also boasts many mixed use and redeveloped spaces designed to fulfill tenants’ specific needs and corporate vision.
Take for instance 2351 Market Street, a former Wells Fargo building turned tech-enabled space thanks to the developers here at Green Street. By applying the concept of adaptive reuse rather than building a new office from scratch, the building’s tenants saved a small fortune on office necessities.
There’s no denying that St. Louis is booming — with industry on the rise, office employment in St. Louis includes nearly 500,000 workers, a significant portion of the city’s total population. In a market this hot, it’s worth considering the long-term payoff of a down payment. It’s likely an investment you won’t regret.