2022 Multifamily Market Trends in Chicago, Illinois
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
According to Chicago Loop Alliance, there’s plenty to celebrate right now in Chicago, especially if you’re watching the multifamily market. For starters, downtown activity is not just up, but it’s smashing through even pre-pandemic levels.
That’s thrilling. Recovery was strong at the Michigan Avenue/Wacker Drive intersection, crushing 2019 levels completely.
Summer isn’t here yet, but if February numbers are this good, then it’s safe to say that the summer months won’t just be on fire because of the temperature. Foot traffic isn’t just good for the downtown area; any area with amenities benefits from foot traffic.
Getting Into Chicago’s Multifamily Trends: Blending Tourism With Residency
Whether you’re looking at multifamily or other asset types, it’s important to study multifamily market trends to get a sense of how everything connects together.
Take multifamily units and hotels, for example. Maybe you’re more interested in looking at hotels for sale in Chicago, but the truth is that today’s hotel travelers can easily become tomorrow’s residents.
So, a city that’s focused on growth is going to build things that speak to the traveler as much as it does to the resident.
Incentive Funding Is the New Gold
The power of incentive funding in Chicago is a tale old as time and impacts the multifamily development market as much as it does the other categories of commercial real estate.
Take this story: the power of incentives are so strong that O’Hare Real Estate asked the Des Plaines City Council to release $7.5 million dollars before the agreed upon time. Unless you’re a Rockefeller, that is far from pocket change.
The company is building a huge project with a lot of moving components, including a Holiday Inn Express hotel, a convenience store and gas station combo, a stand-alone restaurant, a car wash, and a restaurant within the hotel.
If you’re looking for hotels for sale in Chicago, it’s probably wise not to bite off as much as O’Hare Real Estate.
Multifamily Is Taking on Hotel-Style Amenities
One of the more interesting developments of 2022 in Chicago so far is The Habitat Co picking up 344 North Canal St and building a joint venture with Diversified Real Estate Capital. Joint ventures in commercial real estate are certainly nothing new, but it’s the plans for the space that definitely deserve a second look.
The project isn’t slated to begin until spring (for good reason), but it will be a 343-unit residential tower a little northwest of the Loop.
Here’s why this project deserves more attention than meets the eye: the amenities in top multifamily properties mirror the hotel experience that travelers have enjoyed for decades. Luxury CRE deserves its own space in the discussion, and it will be interesting what goes on with this Class-A project.
Track Records Are Everything
Whether looking at a hotel or a plush multifamily project, reputation is truly everything. Neither of these categories lends themselves well to newcomers that don’t have another entity backing the project.
It’s important to lay the right groundwork for not just acquisition, but true adoption within the community.
The Habitat Co. is well known in the greater Chicago area for picking up Class-A properties and knocking them out of the park with features that make you want to use the property space to the fullest.
How can you model these characteristics for your own projects?
That’s the entire point of looking at these projects: pulling out the takeaways for your own projects makes a lot more sense than just dreaming about getting to that level. Everything in commercial real estate should be viewed as a sea of connections and parallels.
All you have to do is draw the lines in a way that makes sense for your specific objectives.
Foot Traffic Is Only the Beginning of the Multifamily Story
Chicago is constantly looking at ways to make the area more suitable for people who want to live, work, and play within the bounds of the city. Bringing new initiatives into play is the name of the game, and it goes beyond just incentives. The city of Chicago wants to ensure that people continue to choose Chicago.
What the multifamily market of Chicago is teaching us is that the amenities make a difference. As the pandemic raged, plenty of people were fleeing to get away from the city. This was understandable, but the truth is that cultural centers are best found in the city. That isn’t to say that suburban life doesn’t carry its own charms, but songs are still written about cities.
You can’t talk about Chicago without talking about the sights, the sounds, the culture, the food, and the plethora of things to do. For those looking at making acquisitions in the near future, examining the multifamily and hotel markets on their own merits just makes sense.
Chicago’s Quiet Multifamily Recovery Is Still a Good Recovery
One of the best words that come to mind when it comes to Chicago’s overall recovery is simple: it’s a quiet recovery. For buyers looking for a city that’s bounced back quickly, Chicago might feel disappointing at first.
The truth is that a slower recovery doesn’t mean that there isn’t activity to look at. The deal sheets are still humming with activity; the news points in this guide should serve you well if you wish to deep dive further.
Examine How the Multifamily Market in Chicago Affects the City as a Whole
The merging of markets is one that can often keep analysts busy, but this is the nature of the commercial real estate world. It’s always changing, always merging at the intersections, and the big deals in the marketplace always give food for thought.
Multifamily always deserves a little more attention because it’s an asset class with a direct and obvious impact on the community. The truth is that there will always be people looking to move, and some people really want their space to have more bells and whistles than the average bear, no sports joke intended.
The road ahead isn’t just looking at multifamily, but looking at how the different elements of multifamily work together in a city as great as Chicago. Once you uncover those connections, you truly have something worth exploring.
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