Worries of apartment oversupply have now shifted to concerns that developers aren’t delivering enough units as demand for rentals shows no signs of relenting.
Rent in Class A buildings Downtown hit a record $3.26 per square foot in the quarter, up 5.8 percent year over year, according to Integra Realty Resources data reported in Crain’s. The Class A occupancy rate ticked up to 94.3 percent, up from 93.2 percent a year earlier.
The positive numbers come despite the addition of more than 15,000 new units in the past three-and-a-half years, according to Integra.
Ron DeVries, senior managing director of the consulting firm, told Crain’s despite indicators to the contrary last year, it now appears developers are not delivering enough apartments to keep up with demand. The result will be continued rising rents, he said.
Chicago is expected to get nearly 8,000 new apartments in the next three years.
Demand for the new units is fueled by the strong Downtown jobs market, thanks in part to corporate relocations from the suburbs and beyond, as well as a strong market preference for renting over buying since the recession. [Crain’s] — John O’Brien