Downtown apartment market is strong, but here comes the pipeline of new units

The new supply is planned at a time when rents are increasing and occupancy is up

Chicago /
Nov.November 20, 2018 10:00 AM

Downtown Chicago (Credit: NEMA Chicago)

Thousands of new apartment units are expected to hit the Downtown market, potentially slowing what has been a steady rise in rents and occupancy rates.

The average monthly rent at Class A apartment buildings Downtown was $3.05 per square foot in the third quarter, up 7.7 percent year over year, according to data from consulting firm Integra Realty Resources reported by Crain’s.

The strong Downtown job market has helped drive demand for apartments, raising the occupancy rate for those newer apartment buildings to 93.7 percent, up from 92 year over year, the report said.

Developers were set to deliver 2,800 new apartments this year, down from a record of more than 4,300 last year. But the dip in new supply is only temporary: Some 4,400 new apartments are expected to hit the market next year, with another 4,000 delivered in 2020.

“We’re going to get back into more supply that will likely exceed demand, so we don’t expect to see much upward movement in rents next year,” Integra senior managing director Ron DeVries told Crain’s.

Landlords in the South Loop will feel the new deliveries the most, DeVries said, as developers complete more than 2,200 units in the neighborhood. The new NEMA Chicago and Essex on the Park complexes alone near the south end of Grant Park are set to deliver almost 1,300 apartments.

Murphy Development and CIM Group also are building a 47-story tower at 1326 South Michigan Avenue, to go with planned buildings from CMK Companies. [Crain’s] — John O’Brien

 

Related Articles

arrow_forward_ios
E-commerce, logistics deals drive demand for Chicago industrial market
E-commerce, logistics deals drive demand for Chicago industrial market
E-commerce, logistics deals drive demand for Chicago industrial market
Guinness picks Chicago as location for second US brewery
Guinness picks Chicago as location for second US brewery
Guinness picks Chicago as location for second US brewery
Kaegi’s higher property assessments shock Chicago landlords
Kaegi’s higher property assessments shock Chicago landlords
Kaegi’s higher property assessments shock Chicago landlords
Hilton Chicago Magnificent Mile Suites and Procaccianti Companies CEO James Procaccianti (Facebook, Procaccianti)
Hilton Chicago Magnificent Mile transferred to lender amid pandemic struggles
Hilton Chicago Magnificent Mile transferred to lender amid pandemic struggles
Greystar buys site earmarked for 20-story West Loop tower
Greystar buys site earmarked for 20-story West Loop tower
Greystar buys site earmarked for 20-story West Loop tower
Elk Grove Village to get $1B data center project
Elk Grove Village to get $1B data center project
Elk Grove Village to get $1B data center project
An early rendering of 523-45 South Wabash Street (BKV Group)
$350M mixed-use development in Loop approved
$350M mixed-use development in Loop approved
Donald Trump with the Trump International Hotel & Tower in Chicago (Getty, iStock)
Trump gets another tax break on Trump Tower retail space
Trump gets another tax break on Trump Tower retail space
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...