Tech, Finance Sectors Revive Growth in Chicago
The city remains a financial powerhouse and continues to add high-paying jobs, helping rent growth achieve a slight recovery.
Chicago rent evolution, click to enlarge
Chicago is living up to its financial hub status and continuing to add high-earning jobs, thus helping rent growth’s slight recovery. The pace of development is not showing any signs of slowing down, as the metro had 17,000 units under construction as of February, more than half of them expected to come online this year.
Tech companies in Chicago are expanding, while others—in health care or education—are looking to consolidate their online presence. Facebook is making space to add about 500 employees and pharmaceutical giant Walgreens Boots Alliance announced it will double its payroll with 300 new tech positions. However, the metro is seeing significant cuts in manufacturing and retail. Chicago’s high sales tax is deepening the impact of e-commerce on traditional retailers, some of which are closing up shop. Carson’s and Bergner’s announced they will lay off about 400 employees this year.
Competition for talent is attracting young professionals, fueling demand for high-end apartments and pushing up absorption of new units. The new tariffs on steel imports could further increase building costs for high-rises in major metros such as Chicago, and this might, in turn, lead to higher rents. Yardi Matrix expects a 2.8 percent rise in Chicago rents for the whole of 2018.
