ST. LOUIS — Downtown’s central business district had everything Less Annoying CRM was looking for when it began plotting its move from its startup digs at a Washington Avenue incubator about eight years ago.
The walkability, urban environment and access to transit were key to recruitment for the young software company with many of its founders and employees also living in the neighborhood. And despite moving to a hybrid schedule because of the coronavirus pandemic, Less Annoying CRM recently recommitted to downtown by signing another five-year lease for its Olive Street office.
“To us in particular, downtown ºüÀêÊÓƵ is super critical,†partner Alex Haimann said. “It’s the front door of our region.â€
Tech companies in recent years have found a home in the central business district — often enticed there by downtown boosters offering startup cash and boasting of the same amenities that led to Less Annoying CRM staying. For many supporters, the burgeoning tech sector is a key piece to revitalizing the neighborhood.
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Signs, so far at least, seem promising: ºüÀêÊÓƵ’ tech sector grew jobs by 4.3% from 2020 to 2021, when commercial real estate firm CBRE ranked the region as a top 30 tech market, according to a new report. And the new National Geospatial-Intelligence Agency headquarters less than 2 miles north has already lured several geospatial companies to open offices downtown and prompted other organizations to make major investments catering to the industry.
But there are still major hurdles, such as crime and the perception of crime, that will need to be tackled. Tech companies, too, have been the slowest to return to the office after the pandemic, while some have also reduced their office space.
“A lot of the tenants that are (downtown) are proud to have stayed and want to support the city in light of the challenges. They feel like it’s their civic duty to stay and want to be part of the solution instead of exacerbating the problem by relocating out of the city,†said David Kelpe, senior vice president of CBRE in ºüÀêÊÓƵ. “They’re there to make a statement.â€
The downtown central business district was once the center of commercial activity for the region before companies began leaving 30 years ago for new buildings in Clayton and west ºüÀêÊÓƵ County. Downtown still has the lowest occupancy rates for offices in the region at 83.4%, according to CBRE. That figure, though, has largely remained stagnant over the past five years — with no major gains in tenants but no major losses either.
One bright spot for the region could be more data centers. The central business district could be primed data centers because of the low utility costs, abundance of fiber optics and available property, said Kelpe.
Miami Beach-based Netrality Data Centers bought two downtown buildings, 900 Walnut Street and 210 North Tucker, in 2016 for its colocation data centers because the properties sit on a fiber optic ring. The properties help facilitate low latency connection, which increases the performance and speed of computer networks emerging high-tech companies require.
“There’s almost no way to run a business that needs ultra low latency without these facilities,†said Gerald M. Marshall, president and CEO.
His company is renovating the properties to add more power that will further support emerging tech companies.
“We’ve found the city of ºüÀêÊÓƵ to be very accommodating and business friendly,†Marshall said.
Many boosters see potential in the northern part of downtown where geospatial companies have opened houses, especially in the Globe Building on Tucker Boulevard.
There, the Globe Building has leased about 200,000 square feet of office space, mostly to tech and geospatial companies. A leading developer of sensitive compartmented information facilities, or SCIF space, needed to review classified information, has taken two floors, said owner and attorney Steve Stone.
Nearby on Washington Avenue, tech incubator T-Rex — where Less Annoying CRM first operated from — partnered with the NGA to establish Moonshot Labs, an unclassified innovation facility, and offers monthly events on the geospatial industry.
T-Rex also is starting a partnership called the Collider Series that’s focused on helping small businesses and entrepreneurs earn business with the federal government, especially in the geospatial sector. The organization also will be hosting a geospatial “hackathon†in late summer, said Patrica Hagen, T-Rex’s executive director.
A new innovation district, called Downtown North, aims to capitalize on the trend and work with other downtown supporters. Currently, it is collecting signatures to formalize a community improvement district to support its efforts in providing a voice to residents and bringing in more business, said John Berglund, managing partner of The StarWood Group, which owns the former Post-Dispatch building on Tucker. He’s hoping to have enough collected by late spring.
Real estate brokers expect more geospatial and tech-related companies to come.
“NGA is going to continue to attract those geospatial companies that want to be near there,†said John Warren, senior director of commercial real estate firm Cushman and Wakefield in ºüÀêÊÓƵ. “There’s no question that there’s going to continue to be spillover.â€
Warren said the downtown area, including just west of the central business district, still has amenities workers want: 85 restaurants, multiple transit stops, and plenty of entertainment from live music venues to professional sports.
At Less Annoying CRM, the company is renovating its downtown office to better accommodate needs after the pandemic. Employees still come in twice a week for company lunches, meeting and other gatherings, Haimann said.
“Other companies will see value of downtown,†he said, “but it will be slow.â€