Chicago Core Concessions Analysis
There has been a multitude of multifamily deliveries in Chicago’s core neighborhoods during the past few years, and this trend will continue through 2020.
In 2017, 4,600 units were delivered, while 3,700 units and up to 7,700 units will follow in 2018 and 2019, respectively. The concession trend will continue through 2020.
While the most extensive concessions are found at buildings in lease up, we are now seeing stabilized buildings offer concessions just to keep their market share. Buildings in lease up are consistently offering up to two months free, while concessions at stabilized buildings are generally capped at one month. In addition to free rent, ‘ghost concessions,’ such as waived pet fees, free parking, or bonus gift cards, are also being used to entice prospective residents at new buildings.
Despite the fact that over 2,000 units were delivered in River North from 2016 to 2018, the average concessions offered in lease up are still less than that of other core submarkets, which proves the strength of River North’s rental market.
We will see concessions continue to rise in submarkets like South Loop and West Loop, where up to 3,800 and 2,900 units, respectively, will be delivered in the next two years.