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Chicago Apartment Supply Up Almost 50%
Chicago apartment supply is surging, as 10,545 new apartments were delivered in the metro in 2017, leading to decreased occupancy and rent growth.
New research from RealPage found that the new supply in 2017 marked an increase of almost 50% over 2016 volume. The number of deliveries ranked eighth in the nation, and far exceeded the average of 5,000-7,000 annual units over the previous three years. The highest concentration of units in the metro were in downtown high-rise properties.
Absorption has been difficult. Occupancy dropped to 94% at the end of 2017 after staying around 95% since the middle of 2010. The 1.2% annual rent growth was the lowest in eight years. Urban core rent growth was negative, and units in those submarkets were 93% occupied.
The construction surge is expected to continue in 2018. Chicago’s No. 8 ranking for multifamily permits in 2017 means elevated development could continue in 2019.
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