Home News Rents Downtown And In The West Loop Expected To Stabilize After Roller Coaster Years

Rents Downtown And In The West Loop Expected To Stabilize After Roller Coaster Years

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DOWNTOWN — After years of rising rents, luxury real estate experts say residents can expect less sticker shock when signing or renewing leases. says.

After a three-year rent roller coaster that saw rents drop significantly in 2020 and surge in 2022, the market is expected to cool as thousands of new residential units are set to come online in the next few years.

Sophie Morrison, marketing director and broker for Downtown Apartment Company, said:

Rents are expected to continue to rise, but are more stable as the market becomes more competitive. Citywide rents are expected to rise by 3.5% to 4%, according to his 2023 Chicago annual report from consulting and appraisal firm Integra Realty Resources.

Apartment construction slowed during the pandemic, but is starting to pick up again, with 2,900 units planned downtown in 2023 and 4,000 units in 2024. According to Crane. The same is true for West Loop, which has 1,700 units under construction and nearly 6,000 additional units in the planning stages.

“With so much supply, I think rents will just stay flat or go down over the next few years,” Morrison said.

The increase in supply could attract residents of luxury apartments who were stranded during the pandemic, tempting them to move out for deals and cheaper rent.

credit: Colin Boyle/Block Club Chicago
Skyscrapers in The Loop along Michigan Avenue on January 11, 2023.

In 2020, many buildings offered shorter lease terms and cheaper rents to retain and attract neighborhood residents. This also attracted people downtown who otherwise might not have been able to afford to live in these units, Morrison said.

In 2021 and 2022, construction will stop and the building will be buried, Demand for housing increased, and so did rents.

Summer 2022 in Chicago will see average monthly rent for a one-bedroom apartment surpass $2,000. This is an increase of 20.6% year-on-year. According to realtor.com.

According to Downtown Apartment Company statistics, the average downtown and West Loop one-bedroom renewal cost at the time was $2,800 to $3,000.

“2021-2022 [rental rates] was really expensive, Still cheaper than moving. Now, in 2022, these updates are happening again, and there’s even more supply on the market. says Morrison.

South Loop resident Mariah Rosado is moving a few buildings north of her existing apartment at 1212 South Michigan Avenue near Grant Park after she couldn’t afford to move last year. She said she felt her current apartment was outdated.

Rosado specifically wanted a luxury building with a 24/7 front desk, in-unit washers and dryers, dog-friendly amenities, a full-service gym, and community events.

credit: Colin Boyle/Block Club Chicago
Teddy the Mini Schnauzer poses for a portrait at the South Loop on January 11, 2023.

After looking at several luxury properties nearby, Rosado chose a one-bedroom corner unit overlooking the lake at 1130 S. Michigan Ave. Her base rent is her $2,100. That’s more than the $1,800 a month she’s paying for her current apartment at 1212 S. Michigan Ave., but she’ll get a lot more, she said.

“We got a corner unit on the 33rd floor with lake views. It has a dog run, dog wash station, beautiful gym, outdoor pool, and community events,” says Rosado. “… I don’t have anything like that in my current building. I feel like I’ve got something really nice.”

Others looking for luxury units can expect more or less the same in Downtown and West Loop, Morrison said.

Prices for one-bedroom apartments in the West Loop and River North, which were $2,800 to $3,000 last year, are approaching $2,200 to $2,800, Morrison said.

credit: Colin Boyle/Block Club Chicago
South Loop resident Mariah Rosado poses for a portrait with her mini schnauzer Teddy in her apartment on January 11, 2023.

Rent is technically more affordable in and around areas like Lincoln Park, Morrison said, due to high-end housing inventory and competition in and around downtown.

Alex Walenta, executive vice president of Fifield Companies, a Chicago-based boutique real estate developer, said the company’s Logan Apartments, a gorgeous mid-rise building in Logan Square that will be completed in March 2020, will have a similar feel to downtown. said that the rent is higher than the building in Sinclair, 727 Madison When Lux on Madison.

one bedroom Logan Apartments Starts at around $2,500 and can run upwards of $3,500 depending on floor plan. Fifield’s other buildings in Downtown and the West Loop range from $2,300 to $2,700.

But what real estate professionals consider the “more affordable” market isn’t affordable for everyone. During the pandemic, many renters were lured into and around downtown by low rates and concessions. According to Cranes.

credit: Colin Boyle/Block Club Chicago
Mariah Rosado walks past a construction site on Michigan Avenue and Roosevelt Road advertising South Loop apartments for rent January 11, 2023.

One of them was Maya Moore, who moved into a studio at 180 N. Jefferson Street, West Loop in July 2021 for $1,100.

She renewed in July 2022 for $1,700, a 64% increase and surpassing out-of-state transplant expectations.

“It really surprised me … I didn’t think anyone would raise their prices that much in just one year, even though the apartments are worth a lot,” Moore said.

At the time, the future in Chicago was uncertain, so Moore decided to renew the lease in 2022. Her goal is to purchase her one bedroom apartment for under $2,000.

Moore is one of the remaining few to move into the lavish building for a COVID-related special.

From 2020 to 2022, Fifield properties often attract tenants like Moore by offering 1-2 months free rent for stable buildings and 2-3 months for newer buildings. said Valenta.

credit: Colin Boyle/Block Club Chicago
Skyscrapers in The Loop along Michigan Avenue on January 11, 2023.

However, many of these renters moved out as rent increases exceeded the budgets of many residents. Buildings offering extreme discounts had to raise rents to catch up, Valenta said.

“Most people who moved around 2020 are moving at this point, even if they couldn’t afford it.

Fifield’s buildings now show a retention rate of 50-60%. In other words, those who can afford the 2022 rent increase are choosing to stay, and those who cannot are being excluded.

“There are some people who can’t afford it and have left. But more people are saying I’m going to make it work and they want to stay in this building in this neighborhood. said Valenta.

Those who can afford to shop in the upscale market can choose for themselves. New luxury buildings slated to open this year include The Row, a 43-story skyscraper. It takes place this June at the booming Fulton Market.

Other opulent buildings slated to open by the end of the year include: 160 N. Morgan, 166 N. Aberdeen When 355 N. Halsted St.

“There are definitely good deals in luxury rental properties if people want to be ahead of the curve,” Morrison said.

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