Living in a downtown apartment will be more expensive this year

After rising more than 30% in 2021, downtown rents are poised to increase at least another 5% this year. "A lot of people are absolutely priced out of the market."

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ComputerStrong9244
ComputerStrong9244
113 · 8 months ago · Reddit

Other than our short-lived recent blip, this is "Sky blue, water wet"-level news.

Bernie_Ecclestone
Bernie_Ecclestone
79 · 8 months ago · Reddit

Sounds like the market is correcting back to normal from when people were basically giving away downtown apartments during covid.

monkeyboats
monkeyboats
28 · 8 months ago · Reddit

“Developers will keep building as long as rents keep breaking records”

Rents are up 30% in last year, expected to go up 5% this year.

Oh and unrelated, another company moves into the West Loop.

https://www.chicagobusiness.com/​commercial-real-estate/​walmart-heir-lukas-walton-white-claw-maker-lease-fulton-market-building?utm_source=cred-monday-alert&utm_medium=email&utm_campaign=20220314&utm_content=article1-headline

FullMetalChungus
FullMetalChungus
28 · 8 months ago · Reddit

My friends rent for a studio at marina city was the same as my 1br in Ravenswood because of pandemic deals. This is just the market correcting prices.

oldbkenobi
oldbkenobi
18 · 8 months ago · Reddit

Weird – I was repeatedly assured that Downtown was dead and nobody would ever want to live in the center of Chicago again.

SteamCleaner23
SteamCleaner23
7 · 8 months ago · Reddit

I’d be surprised if it’s only 5%. A lot of buildings struggled in occupancy in q1 and Q2 2021 still, which means there is still a solid year of burning off Covid rents in the industry.

“Lease trade out” is our big term. The difference in dollar value between the old/​outgoing lease and the renewal/​new tenant lease. It’s what your institutional investors care about, which is leading your property managers to give you those huge increases.

I think it’s still going to be bloody for residents, and there’s no solution. If you move to a cheaper building you’re just perpetuating the cycle, as you’re likely replacing a low outgoing rent. If you accept your high increase, your building will feel more empowered to raise rent again next year. They’re not going to say in 2023 “well we gave the Johnson’s 20% increase last year so let’s keep it at 2% this year”. No, if the market warrants, they will push you again. And demand is so high that they could care less if you move out.

It’s almost to the point where if you’re “only” getting a 5-10% increase at renewal, you’re lucky. I see some places shooting out 20-30% bumps and don’t care if you leave, because that bump is still under market value.

Sadly, the only real solution is for widespread normalization of “living at home”, especially among single people. But who wants to spend their 20s living with mom?