Downtown Chicago rentals soar
A recent article in Crain's Chicago Business revealed that downtown apartment rents rose again in the second quarter of 2012. According to the report, the average net rent for the top tier of downtown apartment buildings hit $2.57 per square foot. This is a record high for downtown rent, up 2.6 percent over the first quarter in 2012 and 5.8 percent higher than last year, according to a Chicago-based consulting firm, Appraisal Research Counselors.
People looking at real estate in Chicago can take this report to indicate the thriving downtown market. Furthermore, this report could encourage people to buy rather than rent as apartment rentals continue to become increasingly pricey and mortgage rates remain low.
The surge in downtown living could be due in part to an improving business sector and a recovering economic climate. A number of business sector announcements have been made recently, including United Airlines' move of its headquarters to the Willis Tower. With United's move from the Elk Grove suburb of Chicago, the company is set to have more than 4,000 employees working out of the downtown location, reported the Chicago Tribune.
An additional recent report in Crain's Chicago Business detailed another major business move. The report indicated that the Academy of General Dentistry has purchased a West Loop office condominium building with intentions of expanding. AGD, the country's second largest dental association, has called the Chicago neighborhood of Streeterville its home for the last 40 years.
These big company relocations to the downtown area of Chicago could be driving the shift to downtown living that is being observed as rent pricing soars. Crain's Chicago Business revealed that the occupancy rate for top tier apartments in downtown hit the highest it has been in six years at 96 percent.
The article stated, "Yet it is the best time to buy in decades, if you look at the numbers. Soaring apartment rents and falling interest rates and condo prices favor owning over renting." While renters may not yet be leaving the rental market in packs to invest in property, these reports could signal a prime time to jump into real estate in Chicago before rental rates and mortgage trends begin to shift.