ST. LOUIS BUSINESS JOURNAL — Commercial lending in St. Louis isn’t keeping pace with other markets, and apartment construction may be reaching the saturation point, according to local banking professionals.
“We talked with our Atlanta Fed colleagues who did a proprietary study that looks at all lenders — banks, insurance companies, REITs, pension funds,” said Julie Stackhouse, executive vice president of the Federal Reserve Bank of St. Louis. “What it showed is exactly what the bankers are saying: CRE lending has flattened in St. Louis. Commercial multi-family lending grew solidly in 2016 and 2017. Thus far in 2018, it is slightly down. Is St. Louis overbuilt? We’re somewhere in that vicinity.”
Three trends point that way, she said: Rents are still increasing, but not as rapidly as previously. Rental concessions — discounts and the like — are increasing. And, “occupancy levels have slipped a little,” she said. “All three suggest a slowing in multi-family makes sense.”