Chicago’s Thriving Landscape Multifamily Report Summer 2018
Rent Growth Picks Up
Supply Slated for Cycle Peak
Investment Slowdown Continues CHICAGO MULTIFAMILY
Market Analysis Demand Fuels Further Growth Summer 2018 Rent growth in Chicago has picked up due to increased demand, reaching Contacts 1.8% year-over-year as of June—its highest value since November 2016. This Paul Fiorilla was mainly driven by a rebound of the higher end of the quality spectrum, Associate Director of Research as rent growth for luxury apartments recovered from the negative [email protected] values registered during last year’s final quarter. Meanwhile, Chicago’s (800) 866-1124 x5764 development momentum is expected to continue, with more than 10,000 units slated for delivery in 2018, which could mark a new cycle high. Jack Kern Director of Research and Publications Chicago is facing a talent gap in the booming technology sector, as [email protected] professionals are migrating toward coastal hubs, according to a LinkedIn (800) 866-1124 x2444 report. This is doubled by the city’s steady population decrease and the 5,400 jobs in information and professional and business services lost in Author the 12 months ending in April. However, with companies such as Google Alexandra Pacurar and Facebook expanding their footprints, the downtown area continues to Senior Writer attract Millennials and Gen Zers looking for well-positioned apartments.
The metro continues to struggle with affordability issues, prompting local authorities to set up a $30 million fund for the creation of 300 affordable units in Chicago’s core districts. An almost complete lack of new workforce housing supply coupled with a healthy demand for urban units will lead to accelerated rent growth, estimated at 2.8% for the whole of 2018.
Recent Chicago Transactions
Coast at Lakeshore East Optima Chicago Center
City: Chicago City: Chicago Buyer: Morguard North American Buyer: Edge Principal Advisors Purchase Price: $223 MM Purchase Price: $155 MM Price per Unit: $432,039 Price per Unit: $476,923
The Park Evanston 1333 Wabash
City: Evanston, Ill. City: Chicago Buyer: New York Life Buyer: Habitat Co. Purchase Price: $127 MM Purchase Price: $125 MM Price per Unit: $448,763 Price per Unit: $410,164
On the cover: Photo by Davel5957/iStockphoto.com 2 Transactions: Price Per Unit (Chicago)
$200,000
$180,000 Transactions: Price Per Unit (Chicago) $160,000 $200,000 $140,000 $180,000 $120,000 $160,000 $100,000 $140,000 $80,000 0 1 2 4 5 8 $120,000 1 1 1 1 01 01 016 20 20 2 2013 20 2 2 2017 20 $100,000
$80,000 Chicago National 0 1 2 4 5 8 1 1 1 1 01 01 016 20 20 2 2013 20 2 2 2017 20
0 2 3 6 7 1 1 1 01 015 01 20 2011 2 20 2014 2 2 20 2018 Chicago National
0 2 3 6 7 1 1 1 01 015 01 Employment Growth: YoY 6mo-avg (Chicago) 20 2011 2 20 2014 2 2 20 2018
3.0% Employment Growth: YoY 6mo-avg (Chicago) 2.5% 3.0%
2.0% 2.5%
1.5% 2.0%
1.0% 1.5%
0.5% 1.0% 6 7 7 -1 -16 -1 -1 t-15 n-16 t n-17 t n-18 c a ul c a ul c a 0.5% O J Apr-16 J O J Apr-17 J O J Apr-18 6 7 7 -1 -16 -1 -1 t-15 n-16 Chicagot Nationaln-17 t n-18 c a ul c a ul c a O J Apr-16 J O J Apr-17 J O J Apr-18
Supply: Percentage of Stock (Chicago) Chicago National
3.0% Supply: Percentage of Stock (Chicago) 2.5% 3.0% 2.0% 2.5% 1.5% 2.0% 1.0% 1.5% 0.5% 1.0% 0.0% 0.5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
0.0% National Chicago 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
Supply: Development Pipeline as of Jun 2018 (Chicago) National Chicago
Supply: Development Pipeline as of Jun 2018 (Chicago)
17,224 Units 18,178 Units
17,224 Units 18,178 Units
40,129 Units Rent Trends
40,129 Units Despite the significant wave of new supply, a strong demand has helped rent growth pick up and reach its highest rate since NovemberPlanned 2016—1.8%Prospective year-over-yearUnder Construction through June—but still trailing the 2.9% U.S. average. Chicago’s average rent reached $1,484, remaining above the $1,405 national rate. Gains were
led byTransactions: the working-class Total Volume (Chicago) Renter-by-NecessityPlanned Prospective segment,Under Construction up 1.8% to $1,218. Strong demand across the
board$4,000 helped rents for luxury units recover from the negative values of the last quarter of 2017.120 Rents in the Transactions:Lifestyle Total segment Volume (Chicago) were up 1.5%, to $2,083. 100 $4,000 120 Tech employers$3,000 such as Google and Facebook continue to relocate or expand in Chicago’s urban core, 80 fueling demand for well-located apartments. Consequently, central areas are now commanding100 rates $3,000$2,000above the $2,000 mark: The Loop ($2,518), Near North Side ($2,381), West Town–Garfield60 Park ($2,245), Near West Side ($2,229) and Evanston–North ($2,177) are the city’s least-affordable80 submarkets. And although most submarkets registered rate hikes, rents contracted across several40 $2,000$1,000 60 areas, including Highland Park–Libertyville (-1.7%) and Schaumburg (-1.2%). 20 40 Despite$1,000 a$0 declining population and migrating tech talent, Chicago’s economy continues to grow,0 fueling 20 demand and supporting2009 absorption 2010 2011 of the 2012 record 2013 number 2014 of units 2015 scheduled 2016 to 2017 come 2018 online in 2018.
Yardi Matrix$0 expects rent growth to reachVolume in2.8% Millions for theNumber whole of Propertiesof 2018. 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Chicago vs. National Rent Growth (Sequential 3 Month, Year-Over-Year) Rent: YoY vs National (Chicago) Volume in Millions Number of Properties
4.0%
Rent: YoY vs National (Chicago)
4.0%3.0%
3.0%2.0%
2.0%1.0%
1.0%0.0%
0.0%
Chicago National
Source: YardiMatrix Rent: Lifestyle vs RBN (Chicago) Chicago National 3.5% Chicago Rent Growth by Asset Class (Sequential 3 Month, Year-Over-Year) Rent:3.0% Lifestyle vs RBN (Chicago)
3.5%2.5% 3.0%2.0% 1.5% 2.5% 1.0% 2.0% 0.5% 1.5% 0.0% 1.0% -0.5% 0.5% 0.0% -0.5%
Lifestyle Renter-by-Necessity
Lifestyle Renter-by-Necessity
Source: YardiMatrix
Chicago Multifamily | Summer 2018 3 Economic Snapshot
Chicago added 34,700 jobs in the 12 months ending in April for a 0.6% increase, well below the 1.7% national rate. Gains were led by government employment (9,600), followed by education and health services (8,200) and trade and transportation (7,100). With the addition of 5,700 jobs, construction expanded by 3.4%, marking the highest jump year-over-year through April.
As many highly skilled professionals migrate toward coastal tech hubs, information and professional and business services lost a combined 5,400 positions. According to a LinkedIn report, the metro is facing a talent gap in technology andTransactions: health Pricecare, Per Unitbut (Chicago) is abundant in finance professionals. Leisure and $200,000
hospitality added 800 jobs, but the sector$180,000 is expecting a boost as several large-scale projects are going up in Chicago. Vista Tower, scheduled$160,000 for completion in 2020, will include 210 luxury hotel guestrooms, while 1101 S. Wabash in South Loop $140,000will offer 342 guestrooms under the Hilton brand. Similar projects, $120,000
such as Hilton Garden Inn McCormick$100,000 Center, Aloft Hotel Mag Mile and Nobu Hotel, are expected to add a total of 1,300 guestrooms to Chicago’s$80,000 downtown area alone. 0 1 2 4 5 8 1 1 1 1 01 01 016 20 20 2 2013 20 2 2 2017 20
With several projects underway, Fulton Market isChicago emergingNational as the hotspot for office development. One of the most active players in the market is investor and developer Sterling Bay. The company’s Fulton
0 2 3 6 7 1 1 1 01 015 01 Market20 projects2011 2 20 are2014 slated2 2 20 to2018 add 1.7 million square feet of office space to the existing inventory. Chicago vs. National Employment Growth (Year-Over-Year) Employment Growth: YoY 6mo-avg (Chicago)
3.0%
2.5%
2.0%
1.5%
1.0%
0.5% 6 7 7 -1 -16 -1 -1 t-15 n-16 t n-17 t n-18 c a ul c a ul c a O J Apr-16 J O J Apr-17 J O J Apr-18
Chicago National
Sources: YardiMatrix, Bureau of Labor Statistics (not seasonally adjusted) Supply: Percentage of Stock (Chicago)
3.0% Chicago Employment Growth by Sector (Year-Over-Year) 2.5% Current Employment Year Change Code2.0% Employment Sector (000) % Share Employment %
901.5%Government 557 11.9% 9,600 1.8% 65 Education and Health Services 736 15.7% 8,200 1.1% 1.0% 40 Trade, Transportation and Utilities 945 20.1% 7,100 0.8% 150.5%Mining, Logging and Construction 176 3.7% 5,700 3.4% 300.0%Manufacturing 420 8.9% 5,500 1.3% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD 55 Financial Activities 306 6.5% 4,100 1.4% 70 Leisure and Hospitality National476 Chicago 10.1% 800 0.2% 80 Other Services 194 4.1% -900 -0.5% Supply:60 DevelopmentProfessional Pipeline as ofand Jun 2018 Business (Chicago) Services 815 17.3% -1,600 -0.2% 50 Information 76 1.6% -3,800 -4.8%
Sources: YardiMatrix, Bureau of Labor Statistics
17,224 Units 18,178 Units
Chicago Multifamily | Summer 2018 4
40,129 Units
Planned Prospective Under Construction
Transactions: Total Volume (Chicago)
$4,000 120
100 $3,000 80
$2,000 60
40 $1,000 20
$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Volume in Millions Number of Properties
Rent: YoY vs National (Chicago)
4.0%
3.0%
2.0%
1.0%
0.0%
Chicago National
Rent: Lifestyle vs RBN (Chicago)
3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5%
Lifestyle Renter-by-Necessity Demographics Affordability
The median home value in Chicago declined slightly to $231,830 in 2017, remaining below the 2016 cycle high of $233,112. The amount has seen little variation over the past few years, similar to affordability rates, which have remained relatively flat since 2013. Owning is still a lot more affordable than renting, with the average mortgage payment accounting for 16% of the area median income, while the average rent equated to as much as 25%.
With policies aimed at preserving the existing affordable stock in place, local authorities have set up a $30 million investment fund, aiming to generate an additional 300 affordable units in core submarkets.
Chicago Rent vs. Own Affordability as a Percentage of Income 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 Rent/Income Mort/Income Rent/Income Mort/Income
Sources: YardiMatrix, Moody’s Analytics
Chicago Median Home Price
$300,000 $300,000 $250,000 $250,000 $200,000 $200,000 $150,000 $150,000 $100,000 $100,000 $50,000 $50,000 $0 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Moody’s Analytics2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Population Chicago vs. National Population
Chicago lost more than 15,000 2013 2014 2015 2016 2017 residents in 2017, marking the third consecutive year of National 316,234,505 318,622,525 321,039,839 323,405,935 325,719,178 negative growth.
The metro‘s population Chicago 7,343,501 7,351,417 7,347,063 7,335,054 7,319,978 contracted by 0.3% in 2017, Metro trailing the 0.7% national growth rate. Sources: U.S. Census, Moody’s Analytics
Chicago Multifamily | Summer 2018 5 Transactions: Price Per Unit (Chicago) Transactions: Price Per Unit (Chicago) $200,000 $200,000 $180,000 $180,000 $160,000 $160,000 $140,000 $140,000 $120,000 $120,000 $100,000 $100,000 $80,000 $80,000 0 1 2 4 5 8 1 1 1 0 1 2 1 4 5 8 01 01 1 016 1 1 1 20 20 2 2013 20 2 2 201701 20 01 016 20 20 2 2013 20 2 2 2017 20
Supply Chicago National Chicago National
0 2 3 60 7 2 3 6 7 1 1 1 1 1 1 01 Deliveries015 01 continue01 at 015a fast01 pace in Chicago, with 4,200 units completed in the first half of 2018, 20 2011 2 20 2014 2 2 20 202011 20182 20 2014 2 2 20 2018 mostly Class A assets in core submarkets. This comes as a response to an increased demand for
modern urban apartments.Employment The Growth: total YoY number 6mo-avgEmployment (Chicago) of Growth: units YoY 6mo-avgcoming (Chicago) online in 2018 is estimated at more than 10,000, above the 8,651-unit cycle peak of 2016. 3.0% 3.0%
More than2.5% 17,200 units were underway in Chicago as of June. Adding units in the planning and 2.5% permitting stages, the pipeline totaled 75,500 apartments. Occupancy in stabilized properties dropped only 402.0% basis points year-over-year through June to 94.9%, mainly due to a steady demand and despite 2.0% solid completions. Roughly 4,500 units have been absorbed in the 12 months ending in June. 1.5% 1.5% Development is concentrated in and around Chicago’s central business district, with more than 9,200 1.0% 1.0% units underway, half of the total number of apartments under construction in the metro. New supply comes0.5% in the form of modern high-rises targeting the Millennial cohort. The 800-unit NEMA tower and 0.5% the luxurious 698-unit Wolf Point East were6 the metro’s largest projects under7 construction7 as of June. -1 -16 -1 -1 t-15 n-16 t n-17 t n-18 c a 6 ul c a 7 7 ul c a J Apr-16 J J Apr-17 J J Apr-18 Both are locatedO on the Near-1 North-16 Side, the metro’sO most- 1active submarket-1 forO new development. t-15 n-16 t n-17 t n-18 c a ul c a ul c a O J Apr-16 J O J Apr-17 J O J Apr-18 Chicago National Chicago vs. National CompletionsChicago as National a Percentage of Total Stock (as of June 2018) Supply: Percentage of Stock (Chicago)
Supply: Percentage of Stock (Chicago)3.0%
3.0% 2.5%
2.5% 2.0%
2.0% 1.5%
1.5% 1.0%
1.0% 0.5%
0.0% 0.5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
0.0% National Chicago 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD Source: YardiMatrix Supply: Development Pipeline as of Jun 2018 (Chicago)National Chicago
Supply: Development PipelineDevelopment as of Jun 2018 (Chicago) Pipeline (as of June 2018) Chicago Completions (as of June 2018) Transactions: Price Per Unit (Chicago)
$200,000
17,224 Units 18,178 Units $180,000
$160,000
$140,000 17,224 Units 18,178 Units $120,000
40,129 Units $100,000 $80,000 0 1 2 4 5 8 1 1 1 1 01 01 016 20 20 2 2013 20 2 2 2017 20 40,129 Units
Planned Prospective Under Construction Chicago National
Transactions: Total Volume (Chicago) 0 2 3 6 7 1 1 1 01 015 01 20 2011 2 20 2014 2 2 20 2018 $4,000Planned Prospective Under Construction 120
Source: YardiMatrix Source: YardiMatrix 100 Transactions: Total Volume (Chicago)$3,000 Employment Growth: YoY 6mo-avg (Chicago) 80 $4,000 120 3.0% $2,000 60 Chicago Multifamily100 | Summer 2018 6 $3,000 40 $1,000 2.5% 80 20 $2,000 60 $0 2.0% 0 2009 2010 2011 2012 2013 2014 2015 2016 201740 2018 $1,000 Volume in Millions Number1.5% of Properties 20
$0 0 2009Rent: YoY 2010 vs National 2011 (Chicago) 2012 2013 2014 2015 20161.0% 2017 2018 4.0% Volume in Millions Number of Properties 0.5% 3.0% 6 7 7 -1 -16 -1 -1 Rent: YoY vs National (Chicago) t-15 n-16 t n-17 t n-18 2.0% c a ul c a ul c a O J Apr-16 J O J Apr-17 J O J Apr-18 4.0%
1.0% 3.0% Chicago National
0.0% 2.0% Supply: Percentage of Stock (Chicago)
1.0% 3.0% Chicago National
0.0% Rent: Lifestyle vs RBN (Chicago) 2.5%
3.5% 3.0% 2.0%
2.5% Chicago National 2.0% 1.5% 1.5% Rent: Lifestyle vs RBN (Chicago) 1.0% 1.0% 3.5% 0.5% 3.0% 0.0% 2.5% -0.5% 0.5% 2.0% 1.5% 0.0% 1.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD 0.5% Lifestyle Renter-by-Necessity 0.0% National Chicago -0.5%
Supply: Development Pipeline as of Jun 2018 (Chicago)
Lifestyle Renter-by-Necessity
17,224 Units 18,178 Units
40,129 Units
Planned Prospective Under Construction
Transactions: Total Volume (Chicago)
$4,000 120
100 $3,000 80
$2,000 60
40 $1,000 20
$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Volume in Millions Number of Properties
Rent: YoY vs National (Chicago)
4.0%
3.0%
2.0%
1.0%
0.0%
Chicago National
Rent: Lifestyle vs RBN (Chicago)
3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5%
Lifestyle Renter-by-Necessity Transactions: Price Per Unit (Chicago)
$200,000
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000 0 1 2 4 5 8 1 1 1 1 01 01 016 20 20 2 2013 20 2 2 2017 20
Chicago National
0 2 3 6 7 1 1 1 01 015 01 20 2011 2 20 2014 2 2 20 2018
Employment Growth: YoY 6mo-avg (Chicago)
3.0%
2.5%
2.0%
1.5%
1.0%
0.5% 6 7 7 -1 -16 -1 -1 t-15 n-16 t n-17 t n-18 c a ul c a ul c a O J Apr-16 J O J Apr-17 J O J Apr-18
Chicago National
Supply: Percentage of Stock (Chicago)
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
National Chicago
TransactionsSupply: Development Pipeline as of Jun 2018 (Chicago)
Investment continued to slow down in Chicago, with roughly $1.1 billion in assets changing hands in the first half of 2018. The number of transactions also indicates moderating activity, with 29 deals closed in the first six months of the year, compared to a total of 94 deals worth $3.6 billion in 2017. 17,224 Units 18,178 Units Most of the properties that traded in the 12 months ending in June are suburban Renter-by-Necessity communities, as investors looking for higher returns target value-add strategies.
The $142,761 average price per unit for the first two quarters is below the $150,760 U.S. figure, down roughly 20% for the year and 24% below the 2016 cycle peak. This is mainly due to a shift in investor 40,129 Units interest, from stabilized properties in core areas to suburban assets. In the 12 months ending in June, deals for suburban properties totaled $2.4 billion, double the total for urban assets—1.2 billion.
Planned Prospective Under Construction
Chicago Sales Volume and Number of Properties Sold (as of June 2018) Transactions: Total Volume (Chicago)
$4,000 120
100 $3,000 80
$2,000 60
40 $1,000 20
$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Volume in Millions Number of Properties
Source: YardiMatrix Rent: YoY vs National (Chicago)
4.0% Top Submarkets for Transaction Volume1 ChicagoTransactions: vs. NationalPrice Per Unit Sales (Chicago) Price per Unit 3.0% Submarket Volume $200,000 ($MM) 2.0% $180,000 Schaumburg 268 $160,000 1.0% Loop 262 $140,000 Wheaton 253 $120,000 0.0% Naperville–West 235 $100,000 Glendale Heights 213 $80,000 0 1 2 4 5 8 1 1 1 1 01 01 016 Mundelein 187 20 20 2 2013 20 2 2 2017 20 Chicago National St. Charles 175 Chicago National
Rent: Lifestyle vs RBN (Chicago) Neart North Side 174 Source: YardiMatrix 0 2 3 6 7 1 3.5% 1 1 Source: YardiMatrix01 015 01 20 2011 2 20 2014 2 2 20 2018 1 From3.0% July 2017 to June 2018 2.5% 2.0% Employment Growth: YoY 6mo-avg (Chicago) 1.5% 3.0%1.0% 0.5% 0.0% Chicago Multifamily | Summer 2018 7 2.5%-0.5%
2.0%
Lifestyle Renter-by-Necessity 1.5%
1.0%
0.5% 6 7 7 -1 -16 -1 -1 t-15 n-16 t n-17 t n-18 c a ul c a ul c a O J Apr-16 J O J Apr-17 J O J Apr-18
Chicago National
Supply: Percentage of Stock (Chicago)
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD
National Chicago
Supply: Development Pipeline as of Jun 2018 (Chicago)
17,224 Units 18,178 Units
40,129 Units
Planned Prospective Under Construction
Transactions: Total Volume (Chicago)
$4,000 120
100 $3,000 80
$2,000 60
40 $1,000 20
$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Volume in Millions Number of Properties
Rent: YoY vs National (Chicago)
4.0%
3.0%
2.0%
1.0%
0.0%
Chicago National
Rent: Lifestyle vs RBN (Chicago)
3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5%
Lifestyle Renter-by-Necessity News in The Metro Brought to you by:
Interra Closes 3 Fifield, Terraco Break Chicago Sales Ground in Chicago
The properties are located Dubbed Logan’s in the suburb of Evanston Crossing, the building and two North Side city in Logan Square will neighborhoods, Avondale feature 220 units and a and Rogers Park. The 27,000-square-foot Target combined transaction store, in addition to other price was $10.1 million. commercial tenants on the Joe Smazal represented ground floor. the buyers.
CRG Breaks Ground Interra Realty Sells On Chicago 2 Chicago Assets
Luxury Building The buildings, which The 12-story tower is changed hands for a slated for delivery in July combined $16.5 million, 2019 and will offer a are located along 2,000-square-foot rooftop Broadway Avenue in the deck, dog salon and coffee Edgewater neighborhood bar. The 149-unit luxury and offer a total of 44 high-rise will also include residential units. ground-floor retail space.
Jupiter Realty Marcus & Millichap To Open Chicago Arranges Chicago Luxury Building Community Sale
The 465 North Park tower, The new owners, a group which offers 444 units and of private investors based more than 10,000 square in California, are set to feet of retail space, is convert the 13-story one of several recent property into rental high-rises changing apartments and improve Streeterville’s skyline. the rooftop deck.
Log on to Multi-HousingNews.com to get the latest metro-specific news.
Chicago Multifamily | Summer 2018 8 Top 10 Largest Multifamily Completions In the Midwest
data by By Roxana Baiceanu
The multifamily sector is gearing up for a banner year in the U.S., with more than 300,000 units expected to be delivered in 2018. The Midwest is no exception, with a number of high-profile apartment projects either nearing completion or already completed.
At the metro level, Chicago positioned itself at the top of the list, based on both unit and property count. The most active submarket was the Near North Side, home to the largest multifamily communities to come online in the Midwest. The Twin Cities and Kansas City follow, both with rapidly growing residential inventories. Columbus and Indianapolis are also emerging, with more than 20 properties completed. At the other end of the spectrum is St. Louis, with a more stagnant construction market, where only 10 projects were delivered during the last four quarters.
Number Date of Property Name City/Submarket of Units Property Owner Completion Optima Signature Chicago/Near North Side 490 Optima 2/1/2018 The Gallery on Wells Chicago/Near North Side 442 Magellan Development Group 11/16/2017 The Lakes of Valparaiso Chicago Greater Area/Valparaiso 407 Weiss Entities 12/6/2017 The IndiGO at Bloomington Twin Cities Greater Area/ Lennar Multifamily 395 4/10/2017 Central Station Bloomington East Communities The Sinclair Chicago/Near North Side 390 Fifield Realty Partners 11/1/2017 Aurelien Chicago/Near North Side 368 Ryan Cos. 6/19/2017 Indianapolis Greater Area/ Flats at 146 368 Sunstone Properties 3/8/2017 Westfield-Noblesville Spoke Chicago/West Town-Garfield Park 363 Bond Cos. 1/2/2018 Commerce Tower on Main Kansas City/Downtown Kansas City 355 Lincoln Property Co. 10/2/2017 American Campus The James Madison/Madison Downtown 348 9/30/2017 Communities
Optima Signature
Chicago’s Optima Signature was the largest community to be completed in the Midwest during the 12 months ending in March. The 46-story, 490-unit tower owned by Optima is located at 220 E. Illinois St. The majority of the space is destined for residential use, while six floors feature office and retail space. The property is LEED Silver certified, offering residents a wide range of amenities, including a children’s playroom, three spas, a media room, a fitness center and a clubhouse.
Chicago Multifamily | Summer 2018 9 Chicago Submarkets
Area # Submarket Area # Submarket Area # Submarket Area # Submarket 1 Kenosha–North 28 Batavia 1 Evanston–South 23 North Park–Niles 2 Kenosha–South 29 Wheaton 2 Rogers Park 24 Montclare 3 Bristol 30 Aurora 3 Lincoln Square 25 Irving Park–Logan Square 4 Harvard 31 Naperville–West 4 Edgewater 26 Northlake 5 McHenry 32 Naperville–East 5 Uptown 27 Oak Park 6 Zion–West 33 Downers Grove 6 Lake View 28 Belmont Cragin–Austin 7 Zion–East 34 Yorkville 7 Lincoln Park 29 West Town–Garfield Park 8 Grayslake 35 Bolingbrook 8 Near North Side 30 Near West Side 9 Waukegan 36 Romeoville 9 Loop 31 Countryside–Westchester 10 Mundelein 37 Hickory Hills 10 Near South Side 32 Berwyn 11 Highland Park–Libertyville 38 Palos Heights 11 Douglas 33 Cicero 12 Huntley 39 Joliet 12 Oakland 34 Lawndale 13 Crystal Lake 40 Orland Park 13 Grand Boulevard 35 New City 14 Buffalo Grove 41 Grundy 14 Kenwood 36 Burbank–Oak Lawn 15 Carpentersville 42 Chicago Heights–North 15 Hyde Park 37 Englewood 16 Palatine 43 Chicago Heights–South 16 Woodlawn 38 Auburn Gresham 17 Arlington Heights 44 Gary–West 17 Greater Grand Crossing 39 Blue Island 18 DeKalb 45 Gary–East 18 South Chicago 40 South Deering–Pullman 19 Elgin 46 Gary–South 19 Wilmette–Northbrook 41 Riverdale 20 Schaumburg 47 Valparaiso–South 20 Des Plaines 42 South Holland 21 Mt Prospect 48 Crown Point 21 Evanston–North 43 Calumet City 22 Bensenville 49 Outlying Kane County 22 Skokie 23 St Charles 50 Outlying Kendall County 24 Roselle 51 Outlying Porter County 25 Glendale Heights 52 Outlying Will County 26 Lombard 53 Southern McHenry County 27 Elbum
Chicago Multifamily | Summer 2018 10 Definitions
Lifestyle households (renters by choice) have wealth sufficient to own but have chosen to rent. Discretionary households, most typically a retired couple or single professional, have chosen the flexibility associated with renting over the obligations of ownership.
Renter-by-Necessity households span a range. In descending order, household types can be:
A young-professional, double-income-no-kids household with substantial income but without wealth needed to acquire a home or condominium;
Students, who also may span a range of income capability, extending from affluent to barely getting by;
Lower-middle-income (“gray-collar”) households, composed of office workers, policemen, firemen, technical workers, teachers, etc.;
Blue-collar households, which may barely meet rent demands each month and likely pay a disproportionate share of their income toward rent;
Subsidized households, which pay a percentage of household income in rent, with the balance of rent paid through a governmental agency subsidy. Subsidized households, while typically low income, may extend to middle-income households in some high-cost markets, such as New York City;
Military households, subject to frequency of relocation.
These differences can weigh heavily in determining a property’s ability to attract specific renter market segments. The five-star resort serves a very different market than the down-and-outer motel. Apartments are distinguished similarly, but distinctions are often not clearly definitive without investigation. TheYardi® Matrix Context rating eliminates that requirement, designating property market positions as:
Market Position Improvements Ratings Discretionary A+ / A High Mid-Range A- / B+ Low Mid-Range B / B- Workforce C+ / C / C- / D
The value in application of the Yardi® Matrix Context rating is that standardized data provides consistency; information is more meaningful because there is less uncertainty. The user can move faster and more efficiently, with more accurate end results.
The Yardi® Matrix Context rating is not intended as a final word concerning a property’s status—either improvements or location. Rather, the result provides reasonable consistency for comparing one property with another through reference to a consistently applied standard.
To learn more about Yardi® Matrix and subscribing, please visit www.yardimatrix.com or call Ron Brock, Jr., at 480-663-1149 x2404.
Chicago Multifamily | Summer 2018 11 Market Data & Analysis Fogelman drives deals with Yardi® Matrix
“Yardi Matrix is a major contributor to our profitable investments and informed property management.”
Mark Fogelman President Fogelman Properties
800.866.1144 YardiMatrix.com DISCLAIMER
Although every effort is made to ensure the accuracy, timeliness and completeness of the information provided in this publication, the information is provided “AS IS” and Yardi Matrix does not guarantee, warrant, represent or undertake that the information provided is correct, accurate, current or complete. Yardi Matrix is not liable for any loss, claim, or demand arising directly or indirectly from any use or reliance upon the information contained herein.
COPYRIGHT NOTICE
This document, publication and/or presentation (collectively, “document”) is protected by copyright, trademark and other intellectual property laws. Use of this document is subject to the terms and conditions of Yardi Systems, Inc. dba Yardi Matrix’s Terms of Use (http://www.yardimatrix.com/Terms) or other agreement including, but not limited to, restrictions on its use, copying, disclosure, distribution and decompilation. No part of this document may be disclosed or reproduced in any form by any means without the prior written authorization of Yardi Systems, Inc. This document may contain proprietary information about software and service processes, algorithms, and data models which is confidential and constitutes trade secrets. This document is intended for utilization solely in connection with Yardi Matrix publications and for no other purpose.
Yardi®, Yardi Systems, Inc., the Yardi Logo, Yardi Matrix, and the names of Yardi products and services are trademarks or registered trademarks of Yardi Systems, Inc. in the United States and may be protected as trademarks in other countries. All other product, service, or company names mentioned in this document are claimed as trademarks and trade names by their respective companies.
© 2018 Yardi Systems, Inc. All Rights Reserved.
Chicago Multifamily | Summer 2018 13