Commercial Real Estate Facts

HOW LARGE IS AN ACRE?

An acre is 43,560 sq. ft. If the acre is a perfect square, each side is 208.71 feet long. However, an acre can be any shape and often is not even a rectangle. Whatever the acre’s shape, oblong, triangle, circle, ell shaped, a crescent, or whatever, so long as it has exactly 43,560 sq. ft. in area, no more and no less, it is an acre. Acreage is usually used to define the size of an area of land. The land can be described as a portion of an acre, such as one third of an acre or multiples of an acre, such as five acres, or five and a half acres.

HOW ARE LEASE RATES CALCULATED IN ST. LOUIS, MO?

As in most areas of the United States, quoted lease rates in St. Louis, MO are the annual cost per square foot, although, on smaller properties, the quoted cost is often the monthly rent. On the actual lease contract, the lease cost is almost always described as an annual amount, payable in monthly installments.

WHAT’S THE DIFFERENCE BETWEEN USABLE SPACE AND LEASABLE SPACE?

In multitenant office buildings, usable space is the space which a tenant has the exclusive right to use. Around 1990, to make the lease rates sound lower, most owners of large, multitenant office buildings began advertising sq. ft. rates based on “leasable” space. Leasable space is the tenant’s usable space plus a pro-rata share of the “common area”, on the same floor. “Common area” is space that’s shared with other tenants on the floor. (Typically, hallways and restrooms, but excluding vertical penetrations, that is, excluding elevator shafts, stairways and vertical chase ways.)

WHAT IS A FULL NET LEASE?

(Sometimes called a TRIPLE NET LEASE, or a NNN Lease.) In a full net lease, the lessee pays all property and occupancy expenses that arise during the term of the lease. All expenses include, but are not limited to, utility services, all building maintenance and repair, grounds maintenance, casualty and liability insurance, real estate taxes and assessments. The lessor’s sole activity is receiving the rent. At the end of the lease, the lessee returns the property to the lessor, in the same condition it was in at the start of the lease, except for normal wear and tear that has not reached a point of needing immediate repair or replacement, as well as all taxes, assessment and insurances costs paid to date and no outstanding bills on maintenance.

WHAT IS A FULL-SERVICE LEASE?

In a full-service lease, the lessee is responsible only for paying the rent and not damaging the property. The lessor pays all maintenance costs, such as janitorial and wear and tear repair, all structural repair, all service costs, such as utilities and ownership costs, such as real estate taxes and insurance. Nevertheless, for the lessee’s own protection, the lessee should buy insurance on the lessee’s furnishings and carry liability insurance. In fact, on full-service leases, it is common for the lessor to require the lessee to have liability insurance and to have the lessor as an additional named insured on the lessee’s policy. Also, it is not uncommon for the lease terms to allow the lessor to charge the lessee, at the end of each year for ownership expenses during the expiring year, which exceed a pre-set amount.

WHAT IS A GROSS LEASE?

In a gross lease, the lessee pays all expenses except real estate taxes, property and casualty insurance, roof and structural maintenance. Thus, the lessee pays utility costs, and all non-structural or roof maintenance, such as janitorial, HVAC, grounds maintenance, etc.

WHAT IS A MODIFIED GROSS LEASE?

A modified gross lease is a gross lease except the lessee reimburses the lessor for any increase in the property’s real estate taxes and insurance premiums over a base amount. The base amount is usually the cost during the first year of the lease or the year prior to the commencement of the lease.

SHOULD I BUY OR LEASE THE PROPERTY I NEED TO OCCUPY?

Generally, buying is preferable, but leasing is frequently the best answer.

1. Owning the property you’re on tends to give greater long-term stability and the prospect of appreciation in value.
2. Leasing usually means lower initial expenses and more flexibility to relocate, if your needs change.
   However, there are exceptions to both these rules of thumb. It’s important to match the market conditions of the desired area, to the finances and dynamics of the enterprise for which you are seeking a location. Unless you have a lot of spare time and are willing to try to learn on the run, it’s best to use the services of an experienced real estate professional, familiar with the past, current and likely future real estate opportunities in the area(s) that interest you. A good professional can also help analyze whether buying or leasing best matches your enterprise.

WHAT IS HILLIKER CORPORATION?

Hilliker Corporation has for over 40 years provided real estate services to clients for properties within 200 miles of St. Louis. Those services include representing real estate sellers, lessors, buyers and lessees, as well as managing properties for real estate owners. Hilliker Corporation also arranges, for its clients, representation for properties beyond Hilliker Corporation’s market area.

As a commercial-industrial real estate firm, Hilliker Corporation works with business and institutional properties. That is, office, industrial, and retail, as well as institutional and land. Hilliker Corporation is not involved in residential real estate, except for representing sellers or buyers of apartment investments. All of Hilliker Corporation’s agents are full time realtors and average, over 15 years with Hilliker Corporation.

WHY HAS HILLIKER CORPORATION FLOURISHED FOR OVER 40 YEARS?

Hilliker Corporation agents make a point of knowing, not just WHAT their clients’ real estate goals are, but understanding WHY their clients have those real estate goals. Understanding the reasons behind their clients’ goals gives Hilliker Corporation’s agents the ability to find the best and often, most creative, solutions for attaining their clients’ goals. It is Hilliker Corporation’s agents’ goal to, when a transaction is completed, be able to say, “My client attained the best achievable solution.”

HOW MUCH PARKING LOT, OR GARAGE SPACE IS NEEDED PER CAR?

In a perfect world, 300 sq. ft per car. This includes a 10’ x 20’ parking space plus, half the width of a shared, 20’ wide access aisle. (That is, a 20’ x 10’ x .5 portion of the aisle.) The 300 sq. ft. figure will be reduced, if the parking spaces are only 9’ (or on occasion) only 8’ wide, or if they are only 19’ long. Note: 8 foot wide spaces are legal but have a cramped feeling and tend to lead to door dings. The increasing presence of crew-cab, pick-up trucks, favors the larger parking space dimensions. Regarding land parcels, the 300 sq. ft. per car (vehicle), assumes ideal dimensions of the land parcel the parking lot or garage is to be located on. For example, if a land parcel is 40’ wide, parking spaces can be located on only one side of a 20 foot wide aisle. Also to be considered, is zoning, which may establish setback lines for parking lots or garages. Further, if a garage is more than one level, space will be taken by ramps. A good rule of thumb is to estimate 300 cars per sq. ft. and then adjust as needed, for onsite conditions and for chosen parking space size.

NOTE, IN ADDITION TO THE ABOVE CONDITIONS:
1 handicap parking space must be provided for a lot with 1–25 parking spaces and 2 handicap parking spaces for a lot with 26–50 parking spaces. For lots with over 50 spaces, the number of required handicap spaces is 2% to 4% of the total spaces, depending on the size of the parking lot. Every handicap space must have a 5 foot wide x 19 foot or 20 foot long access space next to it. The access space can be shared with a neighboring handicap space. If there is only 1 handicap space, it must be van accessible and there must be 1 van accessible space included in every 6 handicap spaces. A standard handicap space can be as little as 8 feet wide. A van accessible space must be 11 feet wide.

IS ST. LOUIS MO A GOOD LOCATION FOR REAL ESTATE INVESTMENT?

Yes, especially if by St. Louis, the entire St. Louis, business area is being considered. The City of St. Louis, with a population of about 300,000 is the hub of a vibrant, growing business community, with a current population of about 2,500,000. Within this community, including the City of St. Louis, businesses and institutions are flourishing.

WHAT ARE THE PHASES OF AN ENVIRONMENTAL STUDY (AUDIT)?

Most sales of business and institutional properties require an environmental audit of the property being sold. This is to assure the buyer that there is no contamination on the property being bought and if the buyer is borrowing any of the purchase money, the lender will almost always require an environmental audit. There are three phases of environmental audits:

PHASE 1:

A licensed environmental engineer makes a visual inspection of the property to see if there are any indications of likely contamination. The engineer also researches the prior uses of the property, to see if there were any prior occupants that used the property for a purpose that is prone to causing contamination. If there are no indications of contamination, there is no further action.

PHASE 2:

If the phase 1 inspection gives any indication that there may be a contaminant on the property, the next step is a phase 2 audit. The phase 2 audit makes inspections to try and find contamination that a visual inspection would miss. This usually involves removing, from the suspected area(s) of the property, sample materials, including, frequently, soil and sending the sample(s) to a testing laboratory. It usually takes a week to 10 days to get the testing laboratory’s report. If the report stipulates there is no contamination in the samples, the property is deemed clean.

PHASE 3:

If the sample(s) sent to the laboratory contain contamination, the area of the property where the sample(s) were located is removed and taken to a licensed storage site. The property is monitored to assure all contamination is removed. Upon certification by a licensed environmental engineer that all contaminated material has been removed from the property and deposited in a licensed storage site, the state issues a “no further action” letter and the property is deemed clean.

WHAT IS A BUILDING, SPRINKLER SYSTEM?

A building sprinkler system is a system designed to spray water on fire within the building. A sprinkler system can usually protect up to 25,000 sq. ft. of building space. Buildings larger than 25,000 sq. ft. need more than one system. Usually, the system consists of an 8” water line entering the building, the water line then having multiple branches. The branches extend, along the ceiling, throughout the 25,000 (or less) sq. ft. space. The branches have sprinkler heads which open and spray water if they are heated by a fire. The 8” line which brings the system’s water into the building cannot have any connections except to the system and must be dedicated solely to the system it serves.

WHAT IS THE DIFFERENCE BETWEEN A WET SPRINKLER SYSTEM AND A DRY SPRINKLER SYSTEM. WHICH ONE TO CHOOSE?

1. In a wet sprinkler system, water is held throughout the system. That is, from the 8” water service line (called the riser), through the system’s pipes and to the sprinkler heads. A sprinkler head will spray water into its area of the building, when its fusible link melts from heat.
2. In a dry sprinkler system, compressed air in the system keeps water from flowing from the 8” riser, into the rest of the system. When the fusible link on a sprinkler head melts, the compressed air between the 8” riser and the sprinkler head escapes through the sprinkler head, depleting the air pressure which has been holding the water in the riser back. With the restraining air pressure gone, water flows through the pipes which lead to the sprinkler head and when the water reaches the sprinkler head, water sprays out of the sprinkler head. The riser is in a heated closet, which it shares with the air compressor that maintains air pressure in the system.
3. Why choose a wet sprinkler system?
   a) As it has no compressor, it is less expensive and requires less maintenance.
   b) Water is sprayed on the fire more quickly, as it is already at the sprinkler head and isn’t delayed while flowing through pipes, from the riser, to the sprinkler head. (On this point, if flammables are prevalent in the building, the fire code will likely require that the sprinkler system be wet, not dry.)
4. Why choose a dry sprinkler system?
   If a building is unheated, water held in the pipes and sprinkler heads of a wet sprinkler system will freeze.

CAN A WET SPRINKLER SYSTEM BE CONVERTED TO A DRY SYSTEM? CAN A DRY SPRINKLER SYSTEM BE CONVERTED TO A WET SYSTEM?

Yes and yes. Sometimes, not at great expense, but conversions can be complex to explain. Hilliker Corporation agents are not engineers, but they have been involved with conversions and can give general guidance. They’ve also had experience with, when chemical fire suppression systems will likely be needed.

WHAT IS A TIF DISTRICT?

A TIF district is an area designated by a local government, to encourage development within the district. The local government usually agrees there will be no real estate taxes on the value created by new construction for a set period of time, after the completion of construction. More often than not, the local government also agrees to facilitate eminent domain, within the district, to make property available for development.

HOW MANY WARDS AND ALDERMEN ARE IN THE CITY OF ST. LOUIS, MO?

St. Louis MO has 14 wards, with 1 alderman per ward, for a total of 14 aldermen. Prior to 2023, St. Louis had 28 wards, with 1 alderman per ward. St. Louis, MO has no second legislative body, but the Board of Aldermen shares authority with the Mayor of St. Louis.

HOW MANY MEMBERS DOES THE ST. LOUIS COUNTY, MO COUNTY COUNCIL HAVE?

The St. Louis County, MO Council has seven members, each representing one of St. Louis County’s seven districts. St. Louis County has no second legislative body, but the Council shares authority with the St. Louis County Supervisor.

GLOSSARY OF ACRONYMS:

COLA: Cost of living adjustment.
CPI: Cost of living index.
FF&E: Furniture, fixtures and equipment.
MOB: Medical office building.
HVAC: Heating, ventilation and air conditioning systems of a structure.
REO: A property owned by the mortgage holder which has failed to sell at auction.
LOI: Letter of intent. Usually a non-binding proposal from a prospective buyer or tenant, to a property owner which describes the major terms of an offer, before a contract is drawn up.
LUST: Leaking underground tank.
MAI: Member of the Appraisal Institute.
NOI: Net operating income.
PUD: Planned urban development.
SIOR: Society of Office and Industrial Realtors.
TI: Tenant improvements to a leased property, made for a lessee by the lessor.
UST: Underground storage tank.

WHAT IS ESTOPPEL?

The law which prevents a party from denying any fact which that party previously acknowledged and another party accepted. An oral acknowledgment can be binding, but difficult to enforce if the first party denies making the acknowledgment.

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Commercial Property Facts

How long are commercial leases in St. Louis?

Commercial lease terms typically range from three to ten years, depending on property type and tenant needs.

Is now a good time to buy commercial real estate in St. Louis?

Market timing depends on the asset type and business strategy. While interest rates and pricing have shifted, St. Louis continues to present opportunities due to its affordability and steady demand in key sectors.

What should investors look for in an industrial property?

Investors typically focus on lessee strength, lease length, cash flow, location, maintenance requirements, and long-term market fundamentals.

What St. Louis areas are strong for industrial real estate?

Submarkets such as Earth City, Maryland Heights, Hazelwood, and Fenton continue to see strong industrial demand due to highway access, labor availability, and proximity to major distribution routes.

What St. Louis areas are strong for office real estate?

Office demand in St. Louis varies by user type and work model. Strong submarkets include Clayton, St. Louis, Chesterfield, and West County, including office parks.

What St. Louis areas are strong for retail space real estate?

Retail performance in St. Louis is driven by visibility, traffic counts, and surrounding density. Areas such as The Grove, Central West End, Clayton, as well as, Mid County, and South County corridors, and high-traffic suburban intersections continue to attract restaurants, service-based users, regional and neighborhood retail.

How does zoning affect commercial real estate?

Zoning determines how a property can be used. Zoning regulations vary over 100 municipalities across the St. Louis region, making it critical to confirm with allowable uses before leasing or purchasing a property.

What makes Hilliker different from other commercial real estate firms?

Hilliker combines deep local market knowledge with long-standing client relationships. Hilliker Corporation emphasizes strategy, transparency, and long-term outcomes, focusing on what’s right for the client, not just the transaction.

How long has Hilliker been active in the St. Louis market?

Hilliker has been active in the St. Louis commercial real estate market for over 40 years, with brokers who bring multi-generational experience and a deep understanding of how the region has evolved and will evolve over time.

What types of clients does Hilliker work with?

Hilliker works with business owners, investors, developers, lessors, lessees, and institutional clients. Clients range from local, family-owned companies to national and regional organizations with a presence in the St. Louis market.

Does Hilliker specialize in certain property types?

Hilliker brokers specialize across major commercial asset classes, including industrial, office, retail, medical, land, investment and institutional properties. This specialization allows clients to work with brokers who understand the nuances of their specific property type.

How does Hilliker help clients navigate complex market conditions?

Hilliker provides market insight, financial analysis, and strategic guidance tailored to each client’s goals. This includes evaluating timing, lease structures, pricing trends, and long-term implications—especially during changing market conditions.

Does Hilliker represent both lessees and lessors?

Yes. Hilliker represents lessees, lessors, buyers, and sellers.

How does Hilliker approach client relationships?

Hilliker prioritizes long-term relationships over short-term wins. Many clients work with the firm across multiple transactions over years or even decades, relying on consistent advice and market knowledge as their needs evolve.

What role does local knowledge play in Hilliker’s approach?

Local knowledge is foundational to Hilliker’s work. Understanding municipal zoning, submarket trends, infrastructure, and neighborhood dynamics allows Hilliker Corporation to identify opportunities and risks that may not be visible at a surface level.

How does Hilliker support owner-users and growing businesses?

Hilliker helps owner-users align real estate decisions with business strategy—whether that means leasing, purchasing, expanding, consolidating, or repositioning property to support long-term growth.

Does Hilliker assist with investment strategy?

Yes. Hilliker advises investors on acquisitions, dispositions, and asset positioning by evaluating cash flow, lessee strength, lease structure, and long-term market fundamentals.

What can clients expect during a transaction with Hilliker?

Clients can expect clear communication, thoughtful guidance, and an organized process from start to finish. Hilliker brokers manage negotiations, due diligence, and coordination while keeping client priorities front and center.

Why is Hilliker well informed on market trends?

Hilliker’s broad and intense activity on behalf of its clients, gives it first-hand knowledge of current trends. Hilliker brokers also actively track other local transactions, lease activity, pricing trends, and economic indicators. This real-time market awareness allows Hilliker to provide relevant, actionable insight rather than generalized advice.

Is Hilliker involved in the St. Louis Region?

Hilliker has deep roots in the St. Louis Region and maintains long-standing relationships with local businesses, municipalities, and organizations contributing to a strong understanding of how real estate impacts the region.

How can Hilliker help me get started?

Hilliker begins by working with you to understand your long-erm and short-term goals, your challenges, and timeline. Upon having knowledge of your goals and needs, Hilliker provides guidance on St. Louis Region real estate preparing for your future. Hiliker guidance includes properties used for business, purposes including office space, industrial warehouses, retail centers, medical facilities and land. In the St. Louis Region this often includes flex space, distribution facilities, and owner-occupied buildings.

Industrial Space in St. Louis

Why is industrial space in Fenton Industrial Park so competitive?

Industrial space in Fenton Industrial Park is highly competitive, especially for smaller bay buildings between 3,000 and 6,000 SF. There has been little new construction in this size range, so available spaces are often leased before they reach the broader St. Louis market. Many entrepreneurs looking to make a move are competing for a limited supply of functional space.