Downtown Chicago’s booming apartment market is headed toward a slowdown rather than a downturn, Crain’s Chicago Business reported, citing data from Integra Realty Resources (IRR). The market’s fundamentals remain strong even after a prolonged construction wave.
“Right now, I think the market’s in relative balance,” Ron DeVries, senior managing director in IRR’s Chicago office, told Crain’s. “We’re not projecting any big rent growth, but we’re not projecting any supply problems.”
The average net rent at Class A apartment buildings was $3.10-per-square-foot in the third quarter, up 1.6% from a year earlier, according to IRR. It was the smallest year-over-year rent increase since Q4 2017.
The downtown Class A occupancy rate, meanwhile, fell to 93.5%, a 20-basis-point decline from Q3 2018. At the same time, absorption levels are down, although still historically high, and IRR projects 3,000 units to be absorbed both this year and next.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism.
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