Chicago’s downtown rental market is booming, and a byproduct of this growth is a rush from developers to capitalize on the momentum.
Currently, there are three developers planning 192 apartments in the West Loop. With the costs of renting downtown at all-time highs and occupancies hovering around 95%, builders are scouring the West Loop, River North and surrounding neighborhoods for possible deals. They want to seize opportunity and stay in front of the curb.
Jessie Levine, parking entrepreneur, has planned a 19-story building housing 97 apartments, which will be located at 723-729 W. Randolph Street. In addition, Chicago-based JRG Capital Partners LLC is looking to build 69 units in seven low-rise buildings at 1118-1158 W. Adams Street. And only a few blocks south, Northbrook-based Michigan Avenue Real Estate Group is looking to construct a 26-unit apartment project at 1000 W. Van Buren St.
The West Loop was at the epicenter of Chicago’s condo boom, but the neighborhood has been limited when it comes to rental apartment development. Thus, there is a large vacuum of opportunity for developers to invest in the neighborhood. This hasn’t gone unnoticed as several developers are flocking to the West Loop in order to stake their claim.
Some are worried that a sudden spike in competition could oversaturate the marketplace, but it’s likely that many of the projects will never get off the ground as groups struggle to secure financing. To secure loans, developers will have to put up a substantial amount of equity. Hence, many of these projects will need partners with strong balance sheets or liquid capital.
As Skokie-based F & F Realty Ltd looks to construct a 492-unit tower at 1 S. Halsted St. and Rosement-based White Oak plans to develop a 351-unit building at 765 W. Adams St, these developers reject the notion of overdevelopment because the belief is that job growth is strong enough to fuel demand. The underlying message here is that the market is undersupplied for the current demand and as the job market improves the demand for rental units will increase exponentially.