2021-2022 Chicago Multifamily Portfolio rent growth by neighborhood
At the start of the pandemic, demand for Chicago rental properties sank to record lows, causing large management companies to offer concessions to prospective renters hoping to lease up apartment buildings with dozens of empty units.
During the 2020 rental slump, prospective renters started to expect major concessions, ranging from one to two months of free rent, free parking, or discounted utility expenses.
Today the city has reopened, workers are finally returning to the office, at very least on a hybrid basis, and we see the appeal of urban life regaining the allure it had pre-pandemic. As a result, owners are no longer offering concessions and are experiencing peak occupancy in their buildings. In many cases, owners monitor bidding wars over apartments in the city’s most desirable neighborhoods.
Avid followers of real estate news already know that this climate amounted to the strongest rental market in Chicago in over a decade, tracking alongside other major metro areas in the US.
Our Chicago portfolio has seen significant rent growth during the past 12 months.
Read further to see how our properties have fared by neighborhood.
West Loop & Fulton Market
Chicago’s West Loop, with the Fulton Market district at its centerpiece, has become one of the most desirable neighborhoods in the city, outshining legacy favorites like Lincoln Park, Gold Coast, Old Town, and River North for renters and developers alike.
Madison Throop, a 72-unit building acquired in the fall of 2020, experienced year-over-year rent growth of nearly 8%. The premium location with countless new development coming around it makes Madison Throop a great long-term hold for cash flow and appreciation over time, having acquired the building at a significant discount during the early phase of the pandemic.
Near Northside
We’ve seen some of our most significant rent growth near the city’s north side, around the Noble Square and Pulaski Park neighborhoods. Noble and Clybourn are standouts, with over a 10% increase in average rent.
This area of the city is known for its neighborhood feel, tree-lined streets, low-rise buildings, easy access to the loop, and O'Hare International Airport via public transit.
Northside, Bucktown, and Logan Square
Lincoln Park, Bucktown, and Lakeview make up some of the most desirable parts of the city’s northside, attracting young high-income renters and established families. We saw stable rent growth in this region of the city, with properties on the west end like Palmer and Damen and Lister standing out above the rest.
Wicker Park
All three of our properties sit in an A+ location in the Wicker Park neighborhood, steps away from central Wicker Park and a little over a block away from the Damen CTA Blue Line Stop. Renters love this neighborhood thanks to its proximity to local restaurants and shops on this booming strip of Milwaukee Ave, anchored by a Starbucks Reserve location. Rent growth was stable across all three of these properties, with Wicker Park Ave. nearly reaching 10% average rent growth.
2023 Will Be a strong year for multifamily Operations In The Midwest; Expect Weakness In The Sunbelt
Renters and investors are seeking out multifamily space creating stable demand for apartment living.
The uncertain economic picture, alongside fewer single-family homes coming to market, has caused would-be buyers to remain renters for the foreseeable future.
The Midwest is under-supplied with new apartments and demand has been steadily increasing.
The Sunbelt region has had a major demand slowdown right as record-high new apartment deliveries are completing construction. Expect the Sunbelt to be weak operationally until all the new supply is absorbed.
