The supply of luxury apartments has doubled since 2015 and another 11,000 luxury rental units are in the pipeline. What’s even more baffling is how quickly all these units are being absorbed. (To put this in context, the downtown market historically absorbs about 2,200 luxury rentals per year). Of the 30,000 luxury rentals in downtown Chicago, 46% have been built since 2015, and most of them have been leasing up quickly.
So, who’s renting all these apartments? For the sixth consecutive year, Chicago was named as a top corporate relocation target. According to articles in Multihousing Pro Magazine and Connect Chicago CRE News, the steady increase of job growth and corporate relocations is largely responsible for the absorption of the influx of luxury rental inventory. Ben Creamer, principal and managing broker of Downtown Apartment Collective, says “Chicago continues to enjoy robust job growth, especially in the tech sector where jobs are concentrated in the city’s urban core (…) This perpetuates the increased demand for Class A rentals in the city, as does the large percentage of millennials and empty nesters who prefer renting to owning. With demand at an all-time high, expect to see rents continue to rise in tandem.”
Speaking to the very different demographics dominating the market– millennials and empty nesters, with Gen Z closely following– means creating amenity spaces and design that will appeal to all of those groups. Another focus on amenity spaces stems from the expected wants and needs of Gen Z and millennials, demographics that tend to value prime locations, short commutes, great common spaces, and tech-integrated features and services and are willing to compromise on the square footage of actual units in exchange for those features. The increase of corporate relocations also means an increased demand for short term and corporate rentals. In response to all the corporate relocation traffic, some of the downtown buildings even offer incentives for employees of nearby companies.
Looking for luxury apartments for rent near downtown Chicago with preferred employer incentives? Contact us today! We’d be happy to keep you in the Loop!
By Sophie Morrison
