Commercial Real Estate News / General CRE / Chicago, IL vs. Aurora, IL: Which Is Better for Businesses?

Chicago, IL vs. Aurora, IL: Which Is Better for Businesses?

Published: 09-21-22 Category: General CRE

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.

If you’re considering relocating your business or starting a new one, it’s crucial to weigh your options. Two highly discussed business opportunities are Chicago and Aurora, IL. Each comes with a million and one pros and cons; however, only one location can be your new home.

So whether you’re interested in commercial real estate in Chicago or commercial real estate in Aurora, we’ll attempt to assist your decision.

We’ll cover everything from the location factors that businesses often look for to how these affect businesses in both the long and short run.

Let’s start by looking at population comparisons.

Population Comparisons

Chicago vs. Aurora: Which Is Better for Businesses?

First and foremost, it is important to consider the population of each location: The latest figures show that Chicago’s population is just over 2.7 million while Aurora’s population is a little over 200,000. So, if you’re looking to reach a large customer base, Chicago is the way to go.

However, there are some benefits to a smaller population as well. First, you should note that the cost of living and doing business in Aurora is significantly lower than in Chicago.

This is due, in part, to the fact that there is less competition for resources. Additionally, because the city of Aurora is smaller, it is sometimes easier to get city officials to pay attention to your needs and help your business grow.

Average Demographics

Of course, it’s not just the number of people that matters; it’s also who those people are. You want to make sure that your target market is present in the city where you choose to locate.

The U.S. Census Bureau has provided these excellent 2020 demographic breakdowns for Chicago, IL and for Aurora, IL:

Median Age: These cities contain a similar age range with Chicago at a median of 34.8 years old and Aurora at 34.4.
Level of Education: 85.9% of Chicago residents have graduated high school while 41% went on to obtain at least a bachelor’s degree. Conversely, 79.5% of Aurora residents received a high school diploma, and only 33.1% received their bachelor’s degree.
Poverty Rate: According to a 2020 American Community survey, 10.6% of Aurora and 17.3% of Chicago residents were living in poverty. However, this number likely isn’t representative of the current conditions.
Occupation: City-Data.com reports that Chicago’s economy is sustained primarily with "manufacturing, printing and publishing, finance and insurance, and food processing" as their primary sectors. Meanwhile, the largest employers in Aurora include the Hollywood Casino Aurora, OSI Group, JVC, and Optimum Nutrition.

You will discover, however, that online research comparing these two cities is much easier for a city like Chicago with robust reporting. Meanwhile, Aurora can be difficult to get exact numbers and averages for as their reporting infrastructure is less developed.

Average Household Income

Additionally, the median household income in 2020 Chicago was $33,900 while the median household income in Aurora is $32,300.

It is interesting to note that both cities have seen a steady increase in household income, and Aurora was outperforming Chicago until the 2020 census. This is likely due to the fact that Aurora’s cost of living is lower, so people can make ends meet on a smaller salary.

Commercial Real Estate Comparisons

Now that we’ve looked at some of the key demographics of each city, let’s take a look at the commercial real estate market in both Aurora and Chicago.

The average price per square foot of commercial real estate in Chicago is about $37 while the average price per square foot of commercial real estate in Aurora is about $22.

Commercial Vacancy Rates

The commercial vacancy rate in Chicago is 10.77% while the commercial vacancy rate in Aurora is 12.19%.

CRE Market Outlook for 2022

Overall, the commercial real estate market is expected to rebound in 2022. However, it is important to note that the rebound will be uneven, with some markets recovering more quickly than others.

Some of the key factors that are expected to affect the CRE market in 2022 include the continued effects of the pandemic, rising interest rates, and the results of local and national elections this year.

Commercial Activity Comparisons

It’s also crucial to understand the commercial market in any given city before making a big move there. If their shopping habits or lifestyles don’t align with your business then it might be better to find another location.

Retail: In-Person Shopping Versus Online Shopping

The pandemic has changed the way that many people shop, with more people than ever before shopping online. It’s also changed the way shop owners buy and lease their shops.

While getting exact numbers would require a more in-depth analysis, we can assume that both cities have experienced that same shift to online retailers.

However, we can also assume that Chicago, with its larger population, has been more affected by this shift than Aurora.

Industrial: Warehouse Storage Activity

The industrial sector has been one of the few to experience exponential growth during and after the pandemic as more businesses reassess their supply chain and logistics needs.

In Chicago, the industrial sector vacancy rate is about 4.4%. Aurora does not currently experience sufficient industrial activity to report.

Office: Office Space Activity

The office sector (especially in Chicago) has been one of the hardest hit by the pandemic, as many businesses have moved to a remote work model.

Both Chicago’s and Aurora’s office space net absorption took hard hits during and shortly following the pandemic with affordable office space opportunities shrinking and major corporations leaving the area.

Office vacancies have slightly increased and rents have slightly decreased in Chicago since Q2 2022; however, quarter-over-quarter leasing activity is now on the rise.

Premium Class A office space in Chicago seems to be the new focus of existing and prospective corporations.

Multifamily: Vacancy Rates & Leasing Activity

The multifamily sector in both areas was also hit hard by the pandemic; however, Chicago especially is on a growth trajectory to recovery that’s expected to moderate from rising interest rates and the Fed’s battle against inflation.

Leasing activity in both cities is up since Q2 2021: Aurora saw about a 12% year-over-year increase in apartment rents and Chicago saw about an 8% increase.

In Chicago, the multifamily sector vacancy rate is about 8.2% while Aurora’s sits at around 5%.

Deciding Which Location Is Right for Your Business

Ultimately, the decision of whether to choose commercial real estate in Chicago or Aurora depends on a number of factors specific to your business.

If you are looking for a large customer base, then Chicago is a clear choice. However, if you are looking to save on costs, then Aurora may be a better option.

There is no one-size-fits-all answer to this question, but we hope that this article has provided you with some useful information to help you make a decision.

Methodology

All figures presented in this article are based on MyEListing.com’s commercial real estate listing data in corroboration with other freely available data and information covering the commercial real estate industry.

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