Centene Moves from Suburban St. Louis to Downtown with New $250M HQ

Sept 24, 2007
By: Barbra Murray, Contributing Editor

Choosing to remain within the Metropolitan St. Louis area, healthcare services company Centene Corp. has decided to build its new corporate headquarters in the city's reemerging downtown area. The development, Centene Centre, could ultimately feature as much as approximately 1.3 million square feet of office and retail space, and will cost an estimated $250 million to complete.

Centene will build the property through BW Development, an entity it created with unnamed partners for the construction of the project. Centene Centre will occupy two blocks within the $650 million mixed-use Ballpark Village district that is being developed by The Cordish Co.; BW Development will acquire the land from Cordish for an undisclosed amount. The initial phase of the Centene project will consist of 700,000 square feet of office and ground-level retail space, as well as parking to accommodate 1,750 vehicles. Centene will initially occupy 400,000 square feet, leaving the remaining 300,000 square feet available for lease until Centene is in need of additional space. A police substation will make its home in part of the leasable space, and the retail segment will be sold to Ballpark Village developer Cordish. Phase II of Centene Centre, which could reach 550,000 square feet of space, will be developed based on demand. Construction of the property is on schedule to get underway in the spring of 2008 and upon completion, Centene will relocate its corporate headquarters from its current location in two buildings in Clayton.

Centene's plan to build its headquarters as opposed to leasing existing space makes sense given the current office market dynamics in the St. Louis area, where tenants seeking large chunks of space would be hard-pressed to find it. According to a second quarter report by real estate services firm Grubb & Ellis Gundaker Commercial, the current vacancy rate in Metropolitan St. Louis is 13.6 percent and dropping, but blocks of space exceeding 10,000 square feet have been gobbled up due in no small part to plans for the Highway 64/40 project. However, developers are beginning to answer the call for more accommodations. TriStar Properties will kick off development of a $23 million spec building featuring nearly 130,000 square feet at its Progress Point office park in O'Fallon next month; and Sachs Properties will add a 100,000-square-foot spec building at its mixed-use Chesterfield Village compound in Chesterfield.

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