150,000 sq. ft. of office space

From the ST. LOUIS POST-DISPATCH 05/17/2007
By Riddhi Trivedi-St. Clair

The developers of NorthPark announced a 150,000-square-foot speculative office building in the mixed-use development at Interstates 70 and 170.

The new building should give relief to St. Louis County's tight commercial-space market, and it signals an expansion of planned office space at the NorthPark project.

The announcement was made Wednesday at an economic summit organized by partners St. Louis-based Clayco and McEagle Properties of O'Fallon, Mo., to talk about the 550-acre NorthPark development and amenities.

Because of construction costs and a relatively soft leasing market for office space in recent years, there has been little or no speculative building recently. The three-story building will be a welcome addition to a tight market, according to industry experts.

Not having available space can be a deterrent for potential tenants looking to move into the area, said St. Louis County Executive Charlie Dooley.

"When people come here, they don't have anywhere to move in," Dooley said. "It is exciting that (Clayco and McEagle) are willing to make something happen rather than sit and wait for something to happen."

In recent years, the only speculative construction in the St. Louis area was in Clayton, said Peter Krombach, senior managing director for CB Richard Ellis. And since those buildings were leased, available space has been difficult to find, he said.

NorthPark includes retail and light industrial space, and plans called for about 600,000 to 700,000 square feet of office space, said Larry Chapman, principal at Clayco.

"Right now we are projecting we will be more than double that amount," Chapman said.

Its location at the intersection of two major interstate highways and proximity to Lambert Field draw strong interest from corporate office clients, developers say. The NorthPark plan is changing and might include an office campus at the southern end of the development along I-70.

"We have been pleasantly surprised by the interest in NorthPark and the quality of prospects," said Chris McKee, president of McEagle Properties.

Dooley called NorthPark the largest redevelopment in St. Louis County history. "It is going to have all new infrastructure and cutting-edge technology."

"NorthPark's tenants can market to other tenants," Krombach said.

The developers now plan to build a million square feet of office space. And there are proposals for 600,000 to 700,000 square feet of light industrial space.

"It's a pretty significant gamble. But this is my 28th year in real estate," Chapman said. "If you set up your development with good control over quality and good amenities, you attract good institutional-level investors, owners and occupants."

The companies have $100 million invested in infrastructure and land costs and expect total investment to be $400 million to $500 million. NorthPark is expected to generate up to 12,000 jobs.

The new office building will be adjacent to the already announced national headquarters and St. Louis campus of Vatterott College and the corporate headquarters of Express Scripts Inc.