MARKET SNAPSHOT: Chicago Sees Largest Payroll Expansion Since Financial Crisis
By Philip Shea, Associate Editor
The Chicago metro area added 35,000 non-farm jobs in the last 12 months, indicating that employment in the nation’s third-most populous city is seeing a comeback. The U.S. government remained the largest employer in the area, while the public school system, city and state also had considerably large staffing levels. The 2.35 percent uptick in employment marks the largest such increase since 2007.
Such a positive development is likely to translate directly into higher rents, as Apartment Realty Advisors reports that average occupancy ticked up 50 basis points between end-of-year 2011 and September 2012 to 94.4 percent. Additionally, the number of properties offering no concessions jumped dramatically during this same time, from 60 percent to 78.3 percent.
Overall rent in the metro increased 1.43 percent in 2012 to $1,090 per month, while the downtown area saw an average market rent of $1,208 per month. It was the western part of the metro, however, that held the highest respective occupancy of 95.6 percent. Submarkets like Elgin and Aurora posted vacancy rates as low as 4.1 percent and had a large number of units in the development pipeline slated for delivery throughout the next couple of years.
In terms of overall construction, Apartment Realty Advisors notes that the downtown area will see over 3,000 units delivered and absorbed by 2014, with 1,300 of these currently in lease-up in five very large developments. The Lex and Randolph Tower developments—by ST Residential and Village Green, respectively—have added 645 luxury, high-end units to the downtown and South Loop areas and are expected to fetch around $1,800 per studio unit.
As far as which sectors gained the most jobs over the past year, the mining and logging sector came in first by a very large margin. Growth in this sector was nearly 18 percent year-over-year, trouncing the closest performing sector—professional and business services, which came in at less than four percent. And even while the government sector maintains the highest staffing levels, this area actually shed jobs over the past 12 months by around two percent.
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