Apartment Market Looking Up in Chicago
All eyes are on the skies, where one Chicago apartment tower after another takes shape as the region's high foreclosure rate and the inability of homebuyers to secure financing have boosted the appeal of renting.
Net rents for Class A apartment units in downtown Chicago spiked 10% this past year, sufficient to spark development activity downtown and in neighborhoods due north, according to Appraisal Research Counselors, a Chicago-based consulting firm.
Strong market fundamentals prompted Chicago-based Magellan Development to break ground on a 499-unit rental property at Lakeshore East, a phased downtown residential development best known for the Aqua, a 739-unit luxury condo-and-rental property completed in 2009. Magellan also is vying with local developers John Buck Co. and Fifield Realty to construct a 40-story high-rise on the site of an existing supermarket in Chicago's Gold Coast.
In an adjacent neighborhood, Houston-based developer Hines Interests has broken ground on 1225 Old Town, a 16-story, 368,000-sq-ft luxury apartment building due to come on line next September.
In all, no fewer than 20 apartment projects are in various phases of development, design or construction. Assuming all are completed, they would add nearly 7,000 units to existing inventory.