ST. LOUIS COUNTY — SSM Health is searching for a new local headquarters, joining a legion of other companies squaring up their real estate needs following the pandemic.
The Creve Coeur-based health care company and hospital system is still determining its office needs and how its employees will work, following the coronavirus pandemic.
“It is unlikely everyone will be back five days a week,” said Gerry Kaiser, its system vice president of facilities and real estate. “We’re trying to find the right mix for SSM. It is not going to be a blanket answer.”
For companies across the region, all options are on the table. Some tenants are cutting back, reducing office space by 20% to 25% on average. Many are leaving bigger, older buildings for smaller, newer spaces with better amenities, said Rick Dames, managing director of commercial real estate firm Avison Young in ӣƵ.
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“They’re able to redeploy that expense into better space and make it appealing,” Dames said.
There are certainly exceptions. Olin Corp., a century-old chemicals and ammunition company, renewed its lease in Clayton for 54,000 square feet. Wealth management firm Moneta Group expanded its Clayton space by roughly 27,000 square feet.
Landlords are generally moving to get deals done quickly, said Dames, whose firm represented both companies in their leases.
“They all know what’s available in market,” he said. “There’s more space than tenants right now.”
A rash of ӣƵ-area companies are reassessing office space right now. Agribusiness giant Bayer and footwear firm Caleres look to sell off their campuses. Clayton-based Centene Corp.’s new CEO, Sarah London, said last month that the national health care insurance giant intends to significantly reduce space. A company spokesperson called it a “fresh perspective” and said it includes remote and hybrid work schedules — but did not say where Centene would cut back nor by how much.
The company had around 1 million square feet of office space in the metro area prior to the pandemic. Centene has already given up to other companies a few floors at its new Clayton office building. That building was to be one piece of its $770 million campus expansion; Centene has yet to break ground on the development’s later phases. And its lease for roughly 104,000 square feet in Creve Coeur also was set to expire this year.
Other health care companies like BJC HealthCare and Mercy say they are reevaluating their needs, too. BJC is determining how to accommodate employees working from home while providing meeting space.
Mercy is consolidating offices where it can.
SSM, which rents all of its non-clinical space, has about 400,000 square feet of offices scattered across the region, a figure that’s roughly stayed the same since before the pandemic. It is seeking 200,000 to 300,000 square feet for a new headquarters to consolidate all of its administrative employees in one location. Its search, Kaiser said, coincided with the pandemic.
“But,” he said, “it probably would have happened either way.”
The health care company’s patient services will not be affected.
