St. Louis multifamily sales activity surges in the first quarter

St. Louis multifamily market overview

Property fundamentals in St. Louis posted little movement in the first quarter, while longer-term trends have been more favorable. Asking rents are up from a year ago. Middle- and lower-tier properties led the way, with combined Class B and Class C rents posting a year-over-year increase of 2.5%. Southern submarkets generally posted the strongest rent gains, though nearly every submarket recorded rent growth. The vacancy rate has ticked higher, though both the quarterly and yearly shifts have been light. Consistent absorption helped tame rises in vacancy amid the wave of completions in recent years. From 2020 to 2024, there was an average of roughly 1,400 units absorbed annually. In the past 12 months, net absorption totaled approximately 1,500 units. Roughly half of all units that were absorbed during this period were in St. Charles County.

The St. Louis multifamily investment market recorded strong performance during the first quarter. There were roughly the same number of transactions in the first quarter of this year as there were during the entire second half of last year. Pricing pushed higher as well, with the median sale price so far this year rising 23% to $207,900 per unit. Class B assets made up 70% of all transactions in the first quarter, with median pricing on these properties increasing by 13% from last year. This, combined with a sharp decrease in Class C trades and an uptick in Class A pricing, pushed the market-wide median price higher. St. Charles County accounted for the greatest share of activity at roughly one-third of all trades, while Mid County also captured a significant portion at roughly 25% of all trades. Cap rates have held steady at 6.5% on average since mid-2025.

Looking ahead for St. Louis:

The drop in expected multifamily deliveries this year will have a widespread impact on operating conditions in St. Louis, though changes are expected to remain relatively modest. With roughly 1,200 units forecast for delivery in 2026, total completions will fall nearly 60% short of the trailing five-year average. Vacancy is expected to improve modestly across all tiers of multifamily properties, following four years of gradual upticks. That improvement will be driven not only by fewer deliveries but also by persistent apartment demand. Asking rents are projected to resume rising in the coming months, closing 2026 with growth roughly matching levels recorded in 2025. Even as other conditions have fluctuated, asking rents have risen in all but one of the past 15 years.

The elevated pace of multifamily transactions in St. Louis is expected to continue throughout 2026, pushing the transaction count back into the normal range for this market after dipping in 2025. Submarkets including Mid County, the East Metro, and Downtown St. Louis are poised to capture large shares of this year’s activity, though there should be widespread increases in investor activity across most major submarkets. The share of Class C properties in the transaction mix should begin to rise throughout the year while Class A trades remain light. As older Class C properties begin to trade more frequently, pricing should soften from the elevated levels recorded in recent months.

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