Busy 2013 Leasing Season Winding Down in Chicago
Hot sheets with the most updated availability and pricing for the buildings have been filling my inbox multiple times a day. The vacancies are rising and concessions are expanding. Most of the apartments we are renting right now are offering at least one month free. We’ve haven’t seen those kinds of deals in a long time.
This is an ideal time for renters, as there are great deals and quality apartment options available.
I have leasing managers contacting me to get a pulse on the current apartment market, so I thought I would offer my perspective on what happened during the summer leasing season and where we are headed.
Never has there been so much hype and media for new Chicago apartment buildings as there was in 2013. Every article, news story and feature detailed at length all of the new properties and told renters why they needed to move and move now. So they did! It was the busiest summer we’ve seen in years.
Renters made decisions faster to take advantage of introductory pricing at the newest buildings in River North, Streeterville and Lakeshore East. And because these buildings are in lease-up phase, they are holding units upwards of 90 days. A lot of the October and November moves found their new apartments in July and August.
At the beginning of this summer the luxury apartment buildings built three years ago were nearly 100% occupied at the highest prices Chicago had ever seen. When the brand new buildings came online starting in April, the pricing at both types of buildings was virtually the same. The brand new buildings offered great incentives that attracted renters who were excited about new choices in the market. The “older” buildings have now started to lower their pricing in anticipation of a slower winter.
What happens next?
It really depends on the mentality of the building owners. If they are okay with it taking a year to lease up a building, then pricing will remain high and leasing will go slower.
If there is a sense of urgency from owners and developers, we will continue to see concessions and great deals for the next six months. This will help fill their properties faster.
Next spring, Chicago will see a whole new group of buildings opening. With the 2013 entrants, and the established properties from a few years ago, there are going to be a TON of luxury apartments available in 2014. We are moving towards a renter’s market.
My advice to building owners: get your units rented quickly. You’re only the new kid on the block for so long until the next property opens for occupancy.
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