Opinion: What’s driving metro Springfield’s economy right now

Ross Murray

Positive demand across health care, education, retail, office and industrial continues to drive the Springfield commercial real estate market. While higher interest rates, elevated construction costs and general economic uncertainty have created challenges, our region continues to benefit from steady population growth, expanding health care and education investment, and a diverse local economy.

One of the most important drivers in the market today is continued growth across Springfield and the surrounding communities, including Republic, Strafford, Nixa and Ozark. The Springfield metropolitan statistical area recently surpassed 500,000 residents, an important milestone that tends to attract the attention of retailers, restaurants, developers, site selectors and corporate real estate decision-makers. That larger population base helps put Springfield into consideration for projects that may have previously bypassed the region. The milestone reinforces our position as the economic hub of southwest Missouri.

That growth supports demand for medical services, professional office users, restaurants, service-oriented retail, logistics, manufacturing and owner-occupied industrial space.

The office market in Springfield continues to be surprisingly strong compared with many larger markets. Nationally, office space has been one of the most challenged sectors since the pandemic, but Springfield has remained resilient. Vacancy remains very low, currently estimated at 3.7% by CoStar Group Inc., just a fraction of the double digit national average rates reported by CoStar and other real estate information services in recent times.

An excellent example of the strength and direction of our office market is the recent sale of one of the former Jack Henry buildings on East Battlefield Road to the University of Missouri. R.B. Murray Company brokered that transaction, which will allow the University of Missouri to expand its Springfield medical school campus into a full four-year program.

That is significant for Springfield. This deal takes a high-quality office asset and repurposes it for a long-term institutional use that will bring students, faculty, jobs and additional economic activity to the region.

Health care continues to be one of the strongest economic engines in southwest Missouri. Mercy and CoxHealth continue to invest heavily in the community, including major pediatric medical facilities that are now moving forward. These projects reinforce Springfield’s role as the medical hub of the region and create additional demand for medical office, support services, housing, retail and professional employment.

Retail has stabilized. This sector experienced renewed growth and redevelopment activity over the past six to 12 months, with Springfield-area retail vacancy estimated around 2.4%, according to CoStar – another local vacancy rate that’s much lower than retail vacancy nationwide. The strongest demand is coming from restaurants, service-oriented retailers, experiential users and well-capitalized brands that want to be in Springfield because of the region’s draw.

Recent retail activity reflects that strength. We brokered the new Hawaiian Bros Island Grill location in Springfield, which has performed extremely well. Another major example is Dick’s Sporting Goods Inc. moving forward with a large-format House of Sport concept at Battlefield Mall in the former Dillard’s space (which is greater than 100,000 square feet). That project is a strong signal that national retailers still believe in Springfield’s long-term retail fundamentals.

The industrial market remains tight, with vacancy at 1.5%, as estimated by CoStar, another figure that’s just a fraction of vacancy rates across the country. Demand has stabilized but remains healthy. Over the past 6 to 12 months, more of the activity has been driven by owner-occupants rather than pure lease demand, although leasing remains solid. Manufacturing, distribution, service companies and local businesses looking to own their real estate continue to be active.

One of the biggest challenges in the industrial sector is new construction. Higher interest rates and rising construction costs have made speculative development extremely difficult. Even where demand exists, rents have had a hard time rising fast enough to justify new construction costs and development risk. That has kept supply constrained and has helped maintain low vacancy.

In 2026, R.B. Murray Co. has brokered more than 300,000 square feet of industrial lease and sale transactions for manufacturing and distribution users thus far, and we currently have several additional similar transactions under contract and expected to close later this year and early in 2027. Those transactions will bring additional buildings, investment and jobs to the Springfield region.

Ross Murray is president of R.B. Murray Co. He can be reached at ross@rbmurray.com.