Six months ago we noted that Appraisal Research Counselors was predicting 8 to 10% rent increases in the downtown Chicago market. That prediction is apparently coming true. And at least one apartment tower, The Bernardin, has achieved increases of more than double the high end of the predicted range.
Crain’s Chicago Real Estate Daily reports:
Amid booming demand for luxury apartments, rents jumped in the past year at the 10 most expensive downtown buildings, according to Appraisal Research. At the Bernardin, a 171-unit building at 747 N. Wabash Ave., net rents rose 21.4% through the end of March, the biggest gain in the top 10, according to Appraisal Research. Net rents include concessions like free rent.
Many landlords say rental rates still have room to grow, with some estimating they could increase 10% from current levels.
Crain’s notes that “six of the 10 buildings with the highest rents were completed within the past year or so …” That’s an indication that rent increases reflect reduced concessions. Tenants who opted in to a new building on the basis of a two- or three-month free rent deal may see their real rent increase dramatically at renewal time.