November 24, 2009 – There have been several Chicago real estate developers who have switched their Chicago condo projects to rental apartments this past year. And while there is still quite a bit of demand for downtown apartments, according to a recent Crain’s article both rental rates and occupancies at luxury apartment buildings dropped in the third quarter of this year. Rates and occupancies had risen for the first two quarters of 2009, according to Appraisal Research Counselors.

Ron DeVries of ARC was quoted in Crain’s as saying that, “It’s really not a signal that it’s a weak market. Demand is strong. We’ve just got a supply bubble right now.”

The article states that average rent in a Class A downtown apartment high-rise dropped to $2.10 per square foot for the third quarter of this year. That’s a 7.1 drop from the same quarter last year.

About 3,270 new downtown apartments were constructed in the past two years and 2,236 are expected to be added in 2010. Add in the 1,747 downtown Chicago condos that were up for rent in the third quarter of this year and that’s a lot of competition.

Many developers are offering one or two months of free rent to get renters into a lease. At Streeter Place, which is a 480 apartment high-rise on 355 East Ohio Street, Golub & Company is offering two months of free rent if you sign a 12 or 14 month lease. Tat building is around 55% leased. And chances are that when the Parc Huron in River North is completed next year those 221 apartments will also be offered with some sort of incentive on rents. So if you’re shopping for Chicago Apartments, you will have plenty of choices to pick from before you make a decision.

[tags]Streeter Place, Chicago Condos, Chicago Real Estate[/tags]

This entry was posted on Tuesday, November 24th, 2009 at 8:57 pm and is filed under Mortgage Information.