Luxury Living consistently tracks leasing data on larger assets in Downtown Chicago’s Class A Market built after 2016. This dataset currently includes ≈60 properties and just over 22,000 total units. These properties set the tone for the entire market. 

Tracking leased rentals as opposed to available units (asking rents) shows what is actually happening in Chicago multifamily. Furthermore, showing how the average gross rents compare to average SF is equally as important, as PPSF has a major impact on how a property is perceived in the market.

Q3 2022: Quality Over Quantity

As expected, leasing volume in Q3 decreased significantly from ≈3,500 leases to ≈2,300 leases. 

Despite the 35% reduction in total rentals from Q2 to Q3, Chicago multifamily remained extremely strong on an average gross rent basis, rising from $3,037 in Q2 up to $3,117 in Q3 (+2.7%). 

Seasonality impacts Chicago as much as any city in the country, but high occupancy and retention made it possible for rents to actually rise in Q3 as rental volume dropped by more than one-third.

Q2 vs. Q3 — Rental Data

Average gross rent increased in four downtown neighborhoods and decreased in three neighborhoods. The below chart shows the variance in average gross rent from Q2 to Q3 by neighborhood.

 Average Gross Rent

• River North saw the largest increase in average gross rent, rising $283 (+8.7%). 
• Gold Coast/Old Town had the largest decrease in average gross rent, dropping $317 (-9.1%).
• Despite the major fluctuations, the average gross rents increased $81 in Q3.

Digging Deeper

• River North had a huge increase in average rents in Q3 when compared to Q2, rising $283 on average.

• • Why? 
    • Average rents for 2 Bedrooms increased $439 (+9%), rising from $4,429 to $4,868.

• Gold Coast/Old Town had the largest decrease in average gross rent, dropping $317 (-9.1%).

• • Why?
    • With fewer ultra-premium units leased in Q3, the average 2 Bedroom rent dropped from $5,029 in Q2 to $4,254 in Q3 (-15.4%).

 Average Square Footage

A common perception is that higher gross rents mean higher square footage. This data proves that is not always the case.

Digging Deeper

• South Loop had a substantial $149 increase (+5.5%) in average gross rent, while only showing a difference of 31 SF.

• • Why?
    • Average gross rents for 2 bedrooms rose $203 on average, while accounting for 5% more of the total inventory leased in Q3 than Q2.

• The Loop/Lakeshore East spike of 108 SF (+14.3%) and gross rent increase of $113 (+3.8%)?

• • Why?
    • There were 3x as many 3 bedroom rentals in Q3 compared to Q2, with an average gross rent increase of nearly $800.

• The average SF in Streeterville was nearly identical, while the average gross rent dropped from $3,656 to $3,474 (5.0%):

• • Why?
    • All unit types saw a rent decrease, but a $1,299 (-17.7%) drop in average gross rent on 3 Bedrooms had quite an impact.
    • 1 Bedrooms, which represented 57.3% of the total Streeterville rentals in Q3, saw a rental decrease of 7.6%, while the 1 Bedroom average SF was nearly identical to Q2 (796 vs. 784).

At Luxury Living, we not only provide data, but analyze the data to help inform developers and capital partners make the best decisions on pricing strategy, unit mix and amenity programming.

Click Here to Download our Q3 Chicago Class A Multifamily Market Update