Chicago Multifamily Report – January 2022
The pipeline is simmering and so are the capital markets.
While Chicago’s multifamily market is showing positive signs, the metro’s road to recovery will likely take some time. Rents averaged $1,689 in November, though the metro’s 0.5 percent rent growth, on a trailing three-month (T3) basis, places it significantly behind the national expansion of 1.0 percent during the same period. Working-class Renter-by-Necessity and Lifestyle rates grew by a respective 0.5 percent and 0.4 percent, to $1,362 and $2,315. Rising occupancy figures may place upward pressure on rents in the near term.
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Chicago added nearly 117,000 jobs during the 12 months ending in September, for an overall gain of 2.7 percent year-over-year. Nearly every sector realized gains during this period, with the largest increases in leisure and hospitality (up 10.7% over the year) and professional and business services (4.1 percent). The metro’s unemployment rate, at 5.4 percent in October, marked a drop following an upswing in June.
Transaction volume hit $2.8 billion year-to-date through November, registering a 92 percent gain compared to 2020’s total volume. Investors primarily targeted RBN assets, which accounted for more than two-thirds of the total. The metro’s development activity has been somewhat muted; while nearly 16,500 units were under construction at the end of November, deliveries totaled 5,360 units year-to-date, far less than the deliveries recorded in any of the past five years.