Downtown Chicago Apartment Rents Reach New Peak

Multifamily landlords have the upper hand over Chicago renters, and that’s not likely to change for years as apartment leasing prices are set to soar amid a cliffdrop for development.

The city’s downtown apartment market reached new heights last year, when the average unit within a group of 84 buildings tracked by Luxury Living surpassed $3,000 for the first time ever, according to the multifamily brokerage and consultant. The mean figure landed at $3,077, up 28 percent from 2023, with units in the Streeterville neighborhood — which holds the largest average floorplans of downtown areas — commanding the most-expensive average rent at $3,648.

Landlords and their leasing teams pushed prices to the new milestone despite smaller units — studios and convertibles, in particular — making up a larger share of deals last year, Luxury Living found.

“Knowing how minimal the new supply pipeline is, it’s easy to see demand will continue to go up. Retention will be high,” said Aaron Galvin, Luxury Living’s founder and a developer of the Saint Grand, a 248-unit tower in Streeterville that was being leased last year after opening to residents.

Lease signings increased 33 percent last year within the buildings studied, up to 14,086 from 10,600 in 2023. But there’s little carryover of new, move-in ready units into this year. In fact, only about 500 units are expected to come online this year, down from the 10-year average of more than 3,500 units, according to Integra Realty Resources. Historically low vacancy rates are the anticipated result.

“Rents are expected to spike in 2025,” Integra said in its outlook.

The next two years aren’t so promising for renters, either, as developers are constrained by tight capital markets, rising construction costs and, most recently, increased uncertainty over material costs as President Trump threatens major trading partners with tariffs.

“Developers indicate virtually every deal remains in a holding pattern until at least mid-2025,” Integra said, noting that the next wave of deliveries won’t occur until 2027 at the earliest.

Behind Streeterville, the next-priciest downtown Chicago submarkets are River North, Gold Coast/Old Town and the West Loop/Fulton Market, which are the only others with average unit rents in excess of $3,000. The Loop was the only neighborhood where renters might have caught a break last year, with the average lease signed decreasing slightly to $2,848, down from $2,872 in 2023, Luxury Living found. The South Loop and River West respectively trailed those neighborhoods.

Furthermore, the average unit size stayed fairly flat last year, at 781 square feet, up from 777 in 2023, but tenants opted far more often for studio and convertible units, forsaking the extra space offered by one-bedroom layouts in exchange for a break on cost, Galvin said. Rents per square foot were up 2.1 percent to $3.94 last year.

“That’s coming down to attainability in terms of income that we’re seeing in the market,” Galvin said. ”There are just that many more people making enough money to qualify for studios and convertibles, as compared to one-beds.”

Renters of smaller units are also less likely to need parking, he said, which developers are noting as they plot their return to the market from the slowdown.

“When you’re looking at construction costs and how to get the development pipeline turned on again, less parking is likely to be more of a trend moving forward,” Galvin said.

Editor’s note: This story was updated to correct the rents per square foot figure.