Chicago’s suburban rental market posted an average occupancy rate of 97 percent in the fourth quarter of 2006, up 1 percent from the same period in 2005, and net rent rose 4.2 percent to $1.06 per square foot in the same period, according to housing analyst Appraisal Research Counselors.
Why has the market improved slightly? Appraisal Research’s Ron De Vries attributes it partly to overall growth in the jobs market.
De Vries notes some other interesting trends. The market for new-construction rental buildings in suburban Chicago was subdued in 2006 because developers generally find it difficult to obtain zoning for multi-unit projects, he said.
The only large new-construction rental project delivered in suburban Chicago last year was the 90-unit 301 Riverwalk Place in Buffalo Grove, where net rent is $1.47 per square foot, said De Vries, speaking at the launch of Appraisal Research’s Chicago Residential Market Overview report on Tuesday.
Rental developments under construction in 2007 include the 112-unit Regency Plaza at Oakbrook Terrace, and Howard Street Station, an Evanston building containing 221 apartments. More options are available in the conversion market where sales were “anemic” in the fourth quarter of 2006 as investors sat on the side-lines, De Vries said. In the conversion market, 3,264 units remained unsold in the fourth quarter of 2006 and 460 were sold, he said.