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CBD Apartment Vacancies Drop Despite Elevated Deliveries
Vacancies in Chicago’s downtown apartment market have tightened, despite an elevated level of new construction, according to Marcus & Millichap. The firm’s new report on the region’s multifamily sector cites corporate relocations and expansions, “boosting incomes and supporting household formation.”
Despite those higher income brackets, though, “many professionals are renting in the city’s dense urban areas, as high costs in these neighborhoods make homeownership difficult.” Accordingly, apartment vacancies in the city began to improve in late 2018 at a faster rate than in the suburbs.
However, Marcus & Millichap sees vacancy metrics moving in the opposite direction in 2019. As many as 9,500 apartments will deliver this year, “potentially reaching a cyclical peak.”
Given all that new product, Marcus & Millichap sees vacancies ticking upward by 30 basis points across the region. That would wipe out much of the 40-bp improvement the Chicago metro area experienced in 2018.
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