From Appraisal Research Counselors (“ARC”) 3rd Quarter 2009 Downtown Chicago Residential Benchmark Report, commenting on prospects for downtown apartment absorption:
[T]he past two years have seen an average absorption of 1,382 units per year compared to 341 units per year over the past 9 years. In 3Q09 alone, 709 units were absorbed. Combining the remaining 704 units needing to be absorbed in buildings already delivered with the 2,236 units to be delivered in 2010, the market will likely absorb the inventory before the Spring 2012 leasing season – setting the stage for potential rent spikes at that time. Of course, should more condominium buildings turn rental, excess supply may push market stabilization further into 2012.
See also Crain’s Chicago Business recent report from ARC on downtown rental rates. Will downtown Chicago rent up new apartments over the next 18 months at the same pace it has during the previous two years?