BurkHill attracts new tenants to Chesterfield office development after $100M investment
By Steph Kukuljan – Reporter, St. Louis Business Journal
Mar 29, 2021, 3:45pm EDT
Mark Burkhart, managing principal of BurkHill Real Estate. Photo by Michael B. Thomas for SLBJ
MICHAEL B. THOMAS FOR SLBJ
Amid a challenging office market, BurkHill Real Estate has signed 23 new tenants and has about 10 more deals pending for its 15-property portfolio in Chesterfield.
The deals come as office vacancy in the St. Louis market grew 2 percentage points to 14.1% in the fourth quarter of 2020, compared to the fourth quarter in 2019. In west St. Louis County, office vacancy grew from 11.6% to 14% year over year, according to the latest research from Cushman & Wakefield.
Private real estate investment fund BurkHill wrapped up a $12 million renovation of the portfolio that it acquired from Sachs Properties in 2019 while many of its existing tenants had employees work from home during the pandemic. The firm's total investment in the 860,000-square-foot portfolio, near Interstate 64 and Clarkson Road, was more than $100 million, including the acquisition price and renovation. Capital improvements include new amenities such as food services, lounges, conferencing facilities, fitness centers and HVAC systems.
“We look for opportunities to maximize the value of a property through strategic capital improvements. Despite the headwinds in 2020, we are very bullish on the amenity-driven suburban office market and short- and long-term demand for office space," said Mark Burkhart, co-founder of BurkHill and co-managing partner of the Chesterfield portfolio.
New tenants are taking up about 76,000 square feet and include:
Mutual of Omaha Mortgage (19,000 square feet)
NFP (12,000 square feet)
Kingdom Capital (8,500 square feet)
Freedom Title (4,500 square feet); and
Lifestance (4,100 square feet)
The new deals follow the big loss of Centene Corp., which vacated 60,000 square feet in July, Burkhart said.
However, BurkHill has pending deals in the works for more than 25,000 square feet. The firm also renewed 42 existing tenants comprising 156,000 square feet, Burkhart said.
By the second quarter of 2022, Burkhart expects occupancy of the portfolio, now called the Offices at Chesterfield Village, to be 90%.
Gershman Commercial Real Estate was retained to provide property management and leasing services for the portfolio.