Downtown Chicago Apartment Rental Rates on Rise

The following are excerpts from an article in Crain’s Chicago Business 8/27/07, by Eddie Baeb
Downtown apartment landlords raised rents to a second consecutive record last quarter. The average gross rent at top quality “Class A” apartment buildings rose to $2.31 a square foot in the second quarter up 1.8% from the previous quarter and 3.6% from the year-earlier according to a report by Appraisal Research Counselors (Crain’s Aug. 20).
With an average Class A unit measuring 920 square feet, that puts monthly rent at about $2,125. Occupancies jumped to 95.4% from 93.4% from the first quarter, but remained lower than the year-earlier period of 97.5%.
Rents are likely to continue rising, perhaps as much as 7% for the year, as there won’t be a large number of new apartments added to the market until 2008, says Ron DeVries, a VP with Appraisal Research. In 2008 there are 6,227 units planned at 16 projects, though Appraisal Research estimates in a report that only 3,099 of those will get built.
In reviewing the above, there may be some upside potential to investors looking to buy condos in the downtown area.

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