Demand still outpacing supply, with 2,400 units added so far this year
(Photo Illustration by Steven Dilakian for The Real Deal with Getty)
Residential rent growth in downtown Chicago is starting to taper off after skyrocketing for months on end, but that doesn’t mean apartment demand is weakening.
So far this year, 2,400 apartment units have been added to downtown, with a total of 3,600 expected by the end of 2024, Crain’s reported, citing Integra Realty Resources. That’s a notable increase from the 2,900 units added last year and 1,500 in 2022.
Despite the new supply, average monthly rent for Class A downtown apartments rose to $3.68 per square foot in the first quarter, up 1.94 percent from the same period last year. That follows a modest 1.7 percent year-over-year increase in the fourth quarter of 2023, indicating a strong market, said Ron DeVries, Integra’s senior managing director.
“We’ve gotten a little bit of rent growth with a lot of supply hitting the market, which tells us that the market is really strong and that the developers are doing well,” DeVries told the outlet.
While recent rent growth has been subdued compared to the dramatic 32 percent year-over-year spike in 2021, the market remains robust. The first quarter saw net absorption of 1,390 units — the highest since the market’s rebound post-pandemic. Integra forecasts a total absorption of 2,790 units for 2024.
