“[New South Loop apartments] have hit the market at the worst time… If you want to live in the South Loop, you have lots of options. That has really slowed down the leasing.”
– Appraisal Research Counselors vice-president Ron DeVries, speaking to Crain’s about the state of the downtown rental market. Rents in downtown Class A buildings dropped to an average of $2.11 per square foot in the fourth quarter of 2008, down from $2.25 in the third quarter, due in part to more landlords offering one or more months free, according to Appraisal Research’s latest downtown benchmark report.
Apartment occupancy in Class A buildings has hit a six-year low, due in part to new competition from the neighborhood’s new condo towers, according to the Crain’s article. Developers are in the process of adding 3,200 units to the South Loop alone, and many of those units are returning to the market as rentals with “good deals.”