Monthly ArchiveMay 2011
May 31, 2011 - If you think rents for suburban Chicago condos won’t follow the upward trend of downtown Chicago condos, think again. According to an estimate from Appraisal Research Counselors in a recent Crain’s report, suburban rents are expected to rise 5% to 6% this year.
Suburban Chicago apartment rents have already gone up 1% from the fourth quarter of last year (2010) and 5.5% from a year ago. Occupancy was 93.6% in the first qyarter of this year (2011), which is up from 92.9% in the fourth quarter of last year (2010) and 92.7% from a year ago, according to the article.
The current median net rent of $1.16 for suburban Chicago apartments is up 1% from the fourth quarter of last year (2010) and 5.5% from a year ago.
ARC Vice-president Ron DeVries was quoted in the article as saying that, “Right now, this is as strong as the suburban market has ever been.”
And don’t expect every apartment landlord to offer concessions on rent. In the fourth quarter of last year (2010) about 51.6% of apartment landlords offered the usual one month of free rent for a new lease. A year ago 57.1% of landlords offered concessions. But that dropped to 43.8% in the first quarter of this year (2011).
With more buyers sitting on the sidelines and opting to rent plus the difficulty that developers often have obtaining zoning for new suburban Chicago real estate projects, demand and rents will probably stay high for some time. Even with more developers and individual investors offering Chicago condos for rent, apartments are still the hottest thing out there.
May 27, 2011 - Chicago real estate developers are still rushing to build rental towers and lenders seem to be willing to finance them. Magellan Development has locked in a construction loan for a 45 story, 499 unit apartment tower that will break ground next month in Lakeshore East, according to a Crain’s report.
Northwestern Mutual Life Insurance Company is providing a $99.5 million loan to Magellan for the high-rise. Magellan’s partner, JP Morgan Asset Management, are putting in $50 million of their own.
This new Lakeshore East apartment tower will be located on 345 East Wacker Drive and is expected to be ready for move-in by February of 2013, according to the article. It won’t be alone, as Appraisal Research Counselors estimates that around 2,200 downtown Chicago apartments will hit the market in 2013.
This yet-to-be-named apartment tower will be the fourth one in the Lakeshore East complex. Other Magellan buildings in the complex include the Tides, the Shoreham and Aqua.
If you can’t wait until 2013, there are lots of Chicago apartments and Chicago condos available for rent right now.
May 26, 2011 - One of the newest rental Chicago real estate developments is already up for sale. EnV, the 29 story River North high-rise with 249 apartments, has been put on the market by the Lynd Company. Crain’s is reporting that some are estimating it could sell for as much as $125 million, which would be around $500,000 per unit. If that happens, it would make EnV one of the most expensive downtown apartment tower sales in Chicago history, according to the article.
Rents at EnV average $2.66 per square foot, or $2,420 per month, the report states. That makes apartments at this tower the fifth most costly to rent downtown, according to Appraisal Research Counselors. The tower is still filling up though, and was just 65.9% leased at the end of the first quarter of this year (2011).
The tower, which is located on 161 West Kinzie Street, may very well go for a record amount to the right investors. With rents on downtown Chicago apartments expected to rise 7% to 10% this year and occupancy rates at record highs, the rental market is one of the hottest investments around. More developers with apartment towers are being tempted to sell out and make a profit now. Condo developers are also opting to sell to investors who switch the units to rental as a quick way to pay off construction loans.