Lots of New Luxury Chicago Apartments on the Way..
In a recent article published in the online (subscriber only section) of Crain’s Chicago Business, writer Alby Gallum reports that there are nine new residential high rises either under construction, set to break ground or seeking financing in downtown Chicago. This equates to an additional 3400 units set to hit River North, Streeteville, the Loop and Old Town by the end of 2012. That is a lot of fancy new apartments!
Just to put it in perspective, we saw about 3000 new apartments come online in the past 18 months. Most of those properties are doing well and are approaching stabilization, even amidst this depressed economy. In fact, Class-A apartments (the new and nice ones that everybody wants) are expected to increase in price by about 10% over the next 12 months. Rentals are hot right now and prices are going up.
But I have to stop and ask the question? Is this too much? Are we headed down a path where we build too many apartments and still have a glut of unsold condos to boot? How many people are really moving to Chicago?
Ultimately, this aggressive building spree is going to help renters in the long run. Prices are going to go up over the next couple of years but when these new buildings open, incentives will be there and the level of finish, amenities and variety of floor plans will provide a great value for luxury downtown apartments. All of these new buildings are going to compete with each other and that always helps the renter. Brand new is great and the wait doesn’t seem too far off.
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