If you own an apartment building in downtown Chicago, there are numerous quarterly publications with very exact data on rent per square foot, occupancy levels, pricing trends, etc. that you can use to tweak your leasing and pricing strategies. However, if you own a building in the Chicago neighborhoods, I have yet to find any publications or guides with the same data. This may be partly due to the tremendous variance in size, finishes, and amenities for buildings in the same neighborhood, or even the same block; which would make it difficult to determine a base line, (for example: a two bedroom vintage apartment which rents for $1500/mo. that sits next door to a similarly sized newer two bedroom that rents for $2500/mo.). So, with this in mind, I set out to take the temperature of the rental market on the north side as we arrive in peak leasing season. I spoke with building owners/managers and rental agents to get their thoughts and feedback, as well as distributed a brief survey, which was completed by over 100 building owners (thank you to all who participated!). Hopefully the result is something that is useful t as you contemplate renewals and turns heading into summer.

Scott Weis of Semco Realty, who primarily owns units in Lincoln Park and Lakeview said he’s seeing incredibly strong activity on his units after a slow fall season. His aim is to minimize turnover and renew leases with 3-4% increases. For units that turn over, he’s getting closer to 5% rent increases. Michael Slater of Slater Realty & Investments, who primarily owns units in Uptown, says that traffic has been very strong for their available units across all unit types. They are getting about 3% increases on renewals and as much as 10% increases on units that turn. Andy Ahitow of Chicago Apartment Finders, who rent apartments all over the city had this to say, “We are seeing a strong start to the spring/summer market. Landlords in most areas of the city are experiencing strong rent growth and a good retention of their existing tenant base. Downtown high rises are seeing smaller increases due to extreme rent growth the last few years, but the low-rise properties in the neighborhoods will again see strong rent growth this year. New jobs are continuing to fill the little vacancy that is out there. We expect to see multiple applications on the limited available apartments over the summer.​”

Jason Dalka, principal at Spaces Property Group, who also rents units all over the north side weighed in, “The 2015 Rental season if off to strong start. We are seeing many of Chicago’s more desirable rental neighborhoods have cooled off a bit since last season. Neighborhoods like Lakeview, Lincoln Park, and the Bucktown/Wicker Park areas have plateaued or have seen very modest increases Y-O-Y with many renters exploring current availabilities in the market but in the end choosing to stay in their current apartments or move to more affordable neighborhoods. Those renters that are choosing to move this season have been finding themselves priced out of the more established rental destinations. Rather than increasing their rental budgets, these renters have decided to expand their search to more diverse neighborhoods hoping to find more affordable accommodations. This migration of renters to areas that have previously been seen as more budget friendly has resulted in an increase in the rental rates in these neighborhoods such as Logan Square, Andersonville, Lincoln Square, Roscoe Village and Ravenswood whose rents have steadily increase over the last 2 or 3 years.”

The consensus from everyone I talked to is that rents are continuing to go up, regardless of neighborhood. On top of that, respondents reported having multiple applications on units more often than not. It also became clear that renewal rates are extremely high, with a healthy dose of respondents saying that tenants may not renew at the first chance they get, but inevitably renew after shopping around and seeing what else is out there. To me, this suggests there may be a little bit more room in renewal rent bumps. Everyone I talked to for this blog reported having occupancy between 95%-100% and expected it to remain close to 100% for the year. They also said that typical timeframe from marketing the unit to a signed lease was between 1-2 weeks, with some instances of same day leasing.

The results of the survey:

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Matt Jones, Managing Director, Kiser Group

Disclaimer: Nothing in property management or leasing is one size fits all. The above is meant to be an overview of the north side rental market from multiple angles and not a definitive playbook on unit pricing.

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