Rent Growth Will Continue for Chicago Multifamily in 2020

The Chicago apartment sector’s solid fundamentals will continue driving both rent growth and new supply, especially downtown. However, a cloud has blown through in the form of property tax concerns, and Marcus & Millichap expects those concerns to linger through 2020.

“Though deal flow was relatively steady during the past year, concerns surrounding new property tax assessments in Cook County will remain a downside risk for many investors,” according to the latest multifamily outlook report from the firm. “The assessor still has at least a year before the entire county has been reassessed, but increases witnessed in suburban submarkets offer insight into what could be in store for county apartment owners.”

That being the case, Marcus & Millichap says the Chicago region’s average effective rent will rise above $1,600 per month this year. The urban core, where vacancy has declined 180 basis points since 2017, will drive the market-wide increase.

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