Chicago Class A Multifamily Market Update — Q3 2026
Luxury Living consistently tracks leasing data on larger assets in Downtown Chicago’s Class A Market built since 2016. This dataset currently includes 91 properties and nearly 30,000 total units—and counting. These properties set the tone for the broader downtown market.
Tracking leased rentals, as opposed to available units (asking rents), shows what is really happening in the Chicago multifamily market.
Downtown Chicago PPSF increased 5.0% in Q3 2026, from $4.20 to $4.41 PSF, the highest level since Luxury Living began tracking quarterly leasing data. This marks a second consecutive year of approximately 5% Q3 PPSF growth, following gains below 2% in both 2023 and 2024.
Q3 delivered a series of records and milestones:
PPSF provides the clearest comparison of pricing across downtown, particularly when changes in apartment size, unit mix, and new construction influence gross rents. While average gross rents varied considerably by submarket, PPSF increased in every submarket and across every unit type.
Beyond the pricing records, apartment size and leasing mix help explain differences in gross rents, while limited availability continues to influence leasing activity across downtown Chicago.
For the first time in Luxury Living’s quarterly dataset, all seven downtown Chicago submarkets averaged above $4.00 PSF. Downtown’s overall average also reached a new high of $4.41 PSF, up 5.0% from $4.20 PSF in Q3 2025.
The floor continues to rise. In Q3 2024, the lowest-priced submarket was River West at $3.61 PSF. In 2025, it was South Loop at $3.86 PSF. This quarter, South Loop ($4.05), River West ($4.09), and Loop/Lakeshore East ($4.11) are separated by just $0.06 PSF. At the upper end, Streeterville, Gold Coast/Old Town, River North, and West Loop/Fulton Market ranged from $4.50 to $4.77 PSF.
The shift is just as clear at the property level. 68 of 91 properties averaged above $4.00 PSF in Q3, up from 56 a year ago. In South Loop, two premium towers set the pace, but seven properties now lease above $4.00 PSF, up from four a year ago.
Streeterville led downtown with PPSF growth of 7.7%, although a trophy asset currently pre-leasing contributed substantially to that increase. Excluding that property, Streeterville still rose 4.4%. Gold Coast/Old Town recorded 5.0% PPSF growth despite a 1.2% increase in average apartment size, while South Loop recorded 4.7% growth with virtually no change in average square footage.
Loop/Lakeshore East highlights the impact of apartment size on average rents. Gross rents declined 2.6% as two new lease-ups added smaller, more attainable apartments, but PPSF increased 5.1%, one of the strongest gains downtown.
River North recorded the smallest PPSF increase at 2.1%, despite a 7.7% decline in average apartment size, which would typically push PPSF higher. This dynamic was largely driven by a single luxury property with some of the largest and highest-priced apartments in the submarket. The property leased 42 fewer apartments than in Q3 2025, lowering the submarket’s average unit size and limiting PPSF growth. The property’s own PPSF increased nearly 5%. Excluding that property, River North PPSF increased 4.4%, much closer to the downtown average.
The market-wide increase did not depend on new construction. Excluding new lease-ups, downtown PPSF increased 4.6%, compared to the overall gain of 5.0%, showing that PPSF growth extended well beyond newly delivered apartments.
PPSF rose in all seven submarkets, but gross rents moved in both directions. Shifts in unit size and mix pushed some submarkets well above the market average and pulled others below last year’s levels.
Average gross rents across downtown Chicago increased 3.8%, from $3,228 in Q3 2025 to $3,350 in Q3 2026. Five of the seven submarkets recorded their highest Q3 rents since 2022. However, changes in apartment size and leasing activity had a substantial impact on the results across downtown.
Streeterville led downtown with an 18.9% increase in average gross rents, reaching $4,667. Much of that increase came from a trophy asset currently pre-leasing, where 74% of its Q3 rentals were 2-bedroom apartments or larger, averaging 2,074 SF. Excluding that property, Streeterville rents still increased 6.0% to $4,162, the highest average gross rent recorded by any downtown submarket since tracking began.
River North and Loop/Lakeshore East were the only submarkets to record declines in average gross rents, mostly due to changes in the apartments being leased. River North declined 5.8% as average apartment size fell 7.7%. As discussed in the PPSF analysis, one luxury property accounted for much of that difference. Excluding it, average rents increased 0.4%.
In Loop/Lakeshore East, two new lease-ups introduced smaller apartments, pushing studio absorption from 31.5% to 43.9% of total activity. Gross rents declined 2.6%, but increased 4.0% when excluding the new properties.
In West Loop/Fulton Market, average gross rents rose 2.9% to $3,253, a Q3 record for the submarket, while PPSF reached $4.50, its highest level since tracking began. With 23 of 26 properties averaging above $4.00 PSF, pricing is now consistent across nearly the entire submarket.
Gold Coast/Old Town recorded 6.3% rent growth to $3,621, with a relatively stable unit mix and no new lease-ups. River West increased 6.8% to $2,894, although growth was 3.1% excluding one 2026 lease-up. South Loop increased 4.7% to $3,086, with no new construction contributing to its results.
Average gross rents can change considerably depending on the size and types of apartments being leased. While gross rents varied considerably across downtown, PPSF increased in all seven submarkets, providing a more consistent indication of rent growth.
The average size of apartments leased across downtown Chicago declined 1.2%, from 769 SF in Q3 2025 to 760 SF in Q3 2026. This was the second-smallest Q3 average on record, but individual submarkets moved in very different directions.
Gross rent depends on two things: PPSF and apartment size. Downtown, PPSF rose 5.0%, but apartments leased were 1.2% smaller, so gross rents rose 3.8%. Three submarkets show how these can move in different directions:
South Loop shows how two shifts can cancel out. Renters leased fewer studios and more 1-bedrooms, which would typically raise average size, but apartments within each type were smaller. Average size held at 763 SF, so its 4.7% rent growth came entirely from pricing.
Across downtown, the average 1-bedroom apartment remained exactly 730 SF in both years, while 2-bedrooms were virtually unchanged at 1,145 SF. Much of the decline in average apartment size came from changes in what renters leased, not from smaller 1-bedroom and 2-bedroom apartments.
Downtown Chicago recorded 3,075 apartment rentals in Q3 2026, an increase of 1.4% from 3,033 in Q3 2025. This marked the first year-over-year increase in leasing volume since Q1 2025, ending five consecutive quarters of declines.
New lease-ups helped drive the increase in leasing volume, contributing additional rentals across several downtown submarkets. Buildings delivered between 2016 and 2023 leased 2.4% fewer apartments than a year earlier, consistent with the high retention rates observed across existing properties.
Leasing growth was strongest at the top of the market. Streeterville and Gold Coast/Old Town, downtown’s two highest-priced submarkets, both increased leasing volume while setting record Q3 gross rents, a sign of continued flight to quality.
Gold Coast/Old Town increased 14.9%, from 323 to 371 rentals, with no new construction. 1-bedrooms led growth, rising from 148 to 182 rentals, while 1-bedroom rents increased 6.7%. More renters chose the submarket even as pricing climbed.
Streeterville recorded the largest percentage increase downtown at 26.8%. The trophy asset pre-leasing contributed to the increase, but leasing at existing Streeterville properties still rose by double digits. Much of that growth came from studios, with rentals at existing properties increasing from 37 to 61. Renters also leased larger studios, pushing the average studio rent up 8.1% to $2,930. At 614 SF, Streeterville studios are the largest downtown, more than 85 SF above the market average.
Loop/Lakeshore East increased 5.9%, although the gain came entirely from new construction. Excluding two new lease-ups, absorption declined 16.9%. West Loop/Fulton Market remained downtown’s most active submarket with 847 rentals, accounting for 27.5% of all leasing, with volume up 1.3%.
South Loop recorded the largest decline, falling 11.8% from 833 to 735 rentals. Nearly half of that decrease came from a property that was in lease-up during Q3 2025 but is now stabilized. Excluding that property, South Loop leasing declined 7.2%. Its share of downtown leasing returned to 23.9%, matching Q3 2023 after an unusually strong Q3 2025.
Studios through 3-bedrooms each set a new Q3 PPSF record. Studios averaged $4.63 PSF, 1-bedrooms $4.33 PSF, 2-bedrooms $4.27 PSF, and 3-bedrooms $4.72 PSF. Studios, 1-bedrooms, and 2-bedrooms also reached record Q3 gross rents.
1-bedroom apartments remained the most popular unit type, accounting for 48.7% of all leasing. Exactly 1,496 1-bedroom apartments were leased in both Q3 2025 and Q3 2026, and the average size also remained unchanged at 730 SF. Average rents increased 4.6% to $3,159, up from 3.8% growth the previous year.
Studios and convertibles increased their share of total leasing from 30.4% to 32.0%, driven by new construction. New lease-ups contributed 87 rentals averaging 472 SF, while leasing at existing properties declined 2.8%. Studio rents increased 2.4% to $2,448, a substantial slowdown from 7.5% growth in Q3 2025. At existing properties, studio rents increased 3.3%, compared to 2.4% market-wide, as smaller, lower-priced apartments entered the market.
The price difference between studios and 1-bedrooms is now the widest we’ve recorded in Q3. Typically, this gap narrows after the spring leasing season. Last year, it fell from $729 in Q2 to $631 in Q3. This year, it held at $711, meaning renters need approximately $25,600 more in annual income to qualify for a 1-bedroom instead of a studio. That difference helps explain why studios remain an attractive option, particularly as rents continue to increase.
2-bedroom rents increased 5.5% to a Q3 record of $4,894, matching the growth rate from the previous year. Rent growth also accelerated throughout the quarter. Their share of total leasing declined from 17.8% to 16.5%, the lowest of any quarter since tracking began in 2022. At the same time, the cost of moving from a 1-bedroom to a 2-bedroom reached a new high. That move now costs an additional $1,735 per month, requiring roughly $62,500 more in annual income to qualify.
Leasing activity followed its familiar seasonal pattern in 2026, increasing through the spring before slowing over the summer. May was the busiest month with 1,625 rentals, followed by a steady decline to 722 in September.
The slowdown after summer has become more pronounced in recent years. September leasing declined 35.7% from August, following a 37.5% decrease in 2025. From 2022 through 2024, September declines ranged from 18% to 30%. With retention remaining high and fewer apartments turning over, more of the year’s leasing activity appears to be focused during the spring and summer months.
Older buildings are leasing fewer apartments as fewer come available. Properties delivered between 2016 and 2023 recorded 2.4% fewer rentals than a year earlier, yet their PPSF rose 4.6%. New buildings filled the gap: six lease-ups contributed 190 rentals during Q3, more than the market’s net increase of 42. Without them, leasing volume would have declined.
As turnover slows at existing buildings, leasing activity increasingly depends on new supply.
Q3 2026 extended the momentum from the first half of the year. Downtown averaged $4.41 PSF, the highest level since tracking began, and for the first time, all seven submarkets averaged above $4.00 PSF. At the property level, 68 of 91 buildings averaged above $4.00 PSF, up from 56 a year ago.
Changes in apartment size, leasing mix, and new construction produced very different gross rent results across downtown. PPSF offered a clearer comparison, increasing in every submarket and across every unit type.
Leasing volume increased for the first time since Q1 2025, supported by new deliveries that attracted renters. At established buildings, leasing activity remained lower while pricing continued to climb, suggesting that limited availability, rather than weaker demand, is holding back rental volume.
Luxury Living helps developers and capital partners navigate these market changes through data-driven pricing, unit mix strategy, and amenity planning, informed by our extensive downtown Chicago leased-rental dataset.
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