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Downtown Apt. Rent Growth Ripples Out to Inner-Ring Suburbs
Continued job creation downtown, coupled with shrinking apartment availability, fueled Chicago rent growth in the second quarter, says Marcus & Millichap. This is having a ripple effect in adjacent neighborhoods and even inner-ring suburbs, supporting both leasing and investment activity.
Within the CBD, the Q1 apartment vacancy rate fell 70 basis points to 5.8% from a year ago. Leasing activity was most pronounced in Streeterville and surrounding neighborhoods.
In the suburbs, meanwhile, year-over-year vacancy dropped to 4.8%. Several northern submarkets posted decreases of nearly 100 bps, according to Marcus & Millichap. Rent growth was faster-paced in the CBD.
Roughly 3,400 units are slated for delivery in Chicago’s downtown core this year, with approximately half of those going on line in the South Loop. Marcus & Millichap projects Chicago-area apartment deliveries, both urban and suburban, to total 7,800 in 2019, or less than the 9,000 completed in both 2017 and 2018.
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