Multifamily construction in the Chicago area is expected to peak this year, but steady demand should hold off any dramatic drop, according to a market report by Marcus & Millichap.
Developers completed 5,500 units in the city last year and another 5,000 in the suburbs, according to Globe St., which first reported on the Marcus & Millichap findings. That pace is expected to continue in 2018, with another 10,500 units expected to come online in the city and suburbs, including 4,900 in the Loop, River North and Streeterville in Downtown Chicago alone.
Inventory grew 3.2 percent in the city last year, holding rent growth to 3.4 percent, the report said. That marked “the third year in a row that operators have been more conservative in the face of competition,” according to the report.
There was, however, a blip.
Suburban rents grew to 6.9 percent last year and were expected to rise again “significantly” this year, the report said.
In the city, vacancy rates rose from 5.1 to 6.5 percent, the report said. Suburban vacancy rates increased more modestly, from 4.9 to 5.2 percent. [Globe St.] — John O’Brien