Market Conditions: Is the Luxury Apartment Market About to Bust?
The building above is The Aurelien at 833 N. Clark in the Gold Coast. (Who thinks up these building names???)
It is expected to begin leasing in 2017.
We’ve chattered about the luxury apartment market off and on over the last several years on Crib Chatter.
Thousands of new apartments have been built since the housing bust and developers aren’t stopping.
In 2016, a record 3830 apartments are expected to begin leasing in downtown Chicago. Remember, “downtown” doesn’t even include those that are built in Lakeview, Wicker Park etc.
From Crain’s:
Landlords are starting to feel the impact of an historic building boom that is adding thousands of apartments to the downtown market. While rents are holding steady so far, the occupancy rate for high-end buildings fell in the third quarter to its lowest level in nearly seven years, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm.
The occupancy rate at Class A buildings fell to 92.2 percent in the quarter, down from 94.8 percent in the second quarter and 93.7 percent in third-quarter 2015, according to the report. The Class A occupancy rate, which does not include buildings in their lease-up phase, hasn’t been that low since late 2009.
Rental incentives are common place now with 1 to 2 months free being the most common deal.
New high-rises are creating a challenge for existing buildings nearby because the developers that built them are more willing to offer free rent just to fill them up. In some cases, developers are giving new tenants two months of free rent if they sign an 18-month lease.
That’s hard to match, said developer Tony Rossi, chairman of RMK Management. A 332-unit tower near Millennium Park that Rossi completed in 2014 is facing tough competition from Marquee at Block 37, a 690-unit tower that recently opened about two blocks away, and Mila, a new 402-unit building that’s offering two months of free rent.
“When someone across the street is offering two months free, at these rent levels that’s four or five thousand dollars,” Rossi said. “If they’re doing two months’ free rent, you might be able to get away with one. You’re going to have to give something.”
Rossi’s building at 73 E. Lake was 85.8 percent occupied at the end of the third quarter, down from 92.8 percent in the second and 90.1 percent a year earlier, according to the Appraisal Research report. The building’s net rent fell to $3.20 per square foot, down 4.8 percent from a year earlier.
2017 is expected to be another record year with 4500 units completed. All of those are already under construction so they will be coming to market.
But another 4200 units are “planned” for 2018. This includes buildings like the second tower at Wolf Point that is expected to have around 700 units.
Foundation equipment has also arrived south of Grant Park for the 76-story Rafael Vinoly building which will have 792 units. Construction has also started at the Riverline project in the South Loop which will be thousands of units unto itself when completed.
With occupancy rates falling, is the luxury apartment boom finally coming to an end?
Also- is a golden period for renters coming in 2017 and 2018?
For downtown apartment landlords, tough times ahead [Crain’s Chicago Business, Alby Gallun, November 14, 2016]
The problem is that even if you get a good initial deal they will try and gouge you on the renewal-often times even when the market is soft. Renting at these big buildings isn’t a good long-term strategy for most unless you don’t mind moving every year or two.
When the next recession comes the $2,500+ per month luxury downtown rental apartments will struggle. It’s hard for any tenant to justify this kind of expense during recessionary times; and even if a tenant’s job is secure (to the extent anyone’s job is truly secure), when co-workers, friends and family are being laid off right and left, and the news is dominated by unemployment rate statistics, few in their right mind will sign a lease at this kind of premium. I’m not against luxury apartments, they certainly fit a niche in the Chicago area, but these just seems to be so many of them and they’re all so expensive compared to what like minded professionals like myself earn. As I say, builders build, that’s just what they do. And if they aren’t building something, anything, then there is no reason for them to go into the office. Hence, you have dozens of high end buildings going up at the same time all chasing the same small pool of renters who want to live in a high rise, live near work and can afford to pay $2,500+ a month.
I’m sure we will start seeing some of these buildings becomes condos in the next few years.
As long as they can get > $3/sf, they wont stop building.
I dont see these flipping to condo’s for at least 5 years (if ever). Condo swaps would require a substantial change in consumer demand and would likely need to be self financed (Or back to the days of liar loans)
If there was sufficient demand for condos, on of the newer building going up would grab that market share.
HD is wrong, the fault (If you want to call it that) resides with the Banks, insurance Co’s and investors. No access to capital or no one to buy the building when complete, no building.
JohnnyU – you’ve got a point, access to capital is a necessary part of the builders building. So we can agree that commercial bankers are to blame too. If commercial bankers aren’t lending and making deals, then there is no reason to go into the office, just like the builders. And investors too. Because they’re all chasing the same yield.
The thing is, is that Commercial banks can hang on and wait a hell of a lot longer than your average consumer can, and are still probably making plenty of money at 85% occupancy, especially over $3 a sqft… thats freakin nuts
This isn’t like mom and pop 2006 housing bubble where people are living paycheck to paycheck to own their houses, these firms have billions of dollars, and can always renegotiate their credit terms, or you know… lower their freakin rents
But wait, shouldn’t high supply of luxury apartments and low demand push prices down? #economics?
maybe demand isn’t as low as you think it is, because people ARE paying for these, pace isn’t at a frenzied pace but the buildings eventually are filling up. Honestly I think this hurts the highrise slumlords more than anything
can you negotiate a limit on rent increases when you enter these buildings?
Maybe Chicago is just catching up with other big cities in terms of what young professionals are willing to pay for rent. Chicago real estate has always been undervalued compared to other major cities. There are high paying jobs here across all industries and people want to live downtown. They are willing to pay a premium to do so.
You also have a situation where people want “new”. Chicago apartment stock sucked for the longest time with most of the buildings being very dated. If you are making good money and wanted a place to reflected your new found wealth while you rent, there really weren’t many good options. Chicago apartments were either outdated high rises OR walk-up DePaul student ghetto apartments.
So combine the desire to want new buildings, downtown locations, and good jobs you have high rental rates.
HD – The end “fault” is with the buyers of the building. Most developers (REIT’s excluded) want to flip as soon as possible. Its only going to stop when they cant get enough of a return to justify buying the building Sonies is probably correct w/ $3/sf & 85% being above water but not enough to make an investment
“can you negotiate a limit on rent increases when you enter these buildings?”
Anything is negotiable—depends how much traffic they are seeing, how many units they have left to fill up. This would seem to be a small concession to request.
To that point, and regarding free months’ of rent—one of my best “negotiations” was when renting a very nice high rise apartment many years ago (priced at around $2500/month) in a building where the larger units weren’t moving too quickly. They were offering 2 months of free rent on a 1 year lease (1 month free upfront; 1 month as a discount prorated over other 11 months); or 4 months of free rent on a 2 year lease. I was tempted, but didn’t sign right away. I came back to the building on a weekday night around 8:30 or 9 and counted how many windows in the 2 tiers of that 3 br floorplan had lights on. Very few– which gave me sufficient “evidence” to ask for a 5th month of free rent, which I got.
JohnnyU, that’s the greater fool theory. I’m sure that’s part of it too. We could probably even find a way to blame the apartment brokers too if we wanted to.
At this point of the cycle I bet yo Chicago is 100% “sponsored posts” these days lol
c on November 15th, 2016 at 10:48 am
can you negotiate a limit on rent increases when you enter these buildings?
Well, as someone else said, everything is negotiable but there isn’t legislation I am aware of to protect anyone who can pay these rents (and there shouldn’t ever be). In NYC for example, Rent Stabilization is cut off once the unit is at $2700/mo – – but actually still applies if the rent grew to that level with a continuing tenant. Now rents are much higher in NYC so $2700 there is more like $4500 here, but you get the point.
If you can pay these rent, you can also move if your landlord tries to gauge you. I have heard anecdotally that the super lux apartments in Chicago have generally been UNABLE to increase rents for this very reason. At this income tier, folks have a lot of options and a lot of “stick it to you” ability in the form of being able to pay a few hundred bucks for a mover.
The best bet is to always rent a condo from an individual owner. I’ve found that they generally have lower rents. Heck my own landlord has raised my rent in three years.
“$2700 there is more like $4500 here”
You meant “like $1500 here”, no?
@ anon (tfo), yes, thank you. Suffering a little dain bramage today.
@Greer – – I completely agree,that is how you get the best deal on a rental with amenities like a roof deck and a gym facility…
*BUT* OMG the amenity packages at some of these new rental buildings!!! If I were in my upper 20’s or early 30’s and making serious coin, and if my SO was in the same boat, I would rent one for at least a year.
I toured Xavier and Next during Open House Chicago and I was impressed. I was actually more impressed by Xavier because I thought their common amenities were more extensive and would be amazing if you were a young entrpreneur – – you could meet with clients and not need to pay for an office because they have several little “office nook” type things they call “cabins.” I also liked the fact that at Xavier you cannot reserve any amenity – – it is first come first served and you are forced to meet your neighbors. Next was actually bragging that their amazing TV lounge was already reserved for next year’s superbowl. That would deter me knowing that you will pay for an amenity and possibly never get to use it. To each his own though.
The market has become quite saturated just within the last year with some larger new luxury high-rises being built. As Liz mentioned, some of them have amenities which are very impressive. Take MILA for instance, whoa! In the Loop also have Marquee @37, One Eleven, 73E Lake. Across Michigan you also have Aqua & the Coast too. In the RN area Wolf Point West just opened as did the Hensley, NEXT, Xavier, and then 805 LaSalle & Chestnut Tower. These even make JeffJack, AMLI, FlairT, GP, EnV, Chicagoan, and One Superior look older. As noted, the Aureliean, Gallery on Wells, Exhibit on Sup, Niche 905, and even the Sinclair are opening soon. In Streeterville the 2nd Omni is opening, Moment, and 565 Park, etc as well as ‘older’ ones like 500LSD, the Streeter & @Water.
Making six figures at about 30, these are some great options. Sure you could buy a 2 bed in Wicker for 385K and build equity and eventually turn it; however, the value in these luxury high-rises is in the networking and lifestyle. Great gyms, pools, decks, laundry, dry cleaning, hosted parties, etc. At the $2,500 1BR or $3,700 2BR range, you have a lot of good options. My friends from SF, NYC, Boston, etc. all cannot believe how cheap some of these are. With the inventory at these level many are offering two month’s of free rent. Thus, if you are okay moving around a couple times, you can score some serious deals for a few years before ‘growing up a bit’ and buying a place if you job/life is stable enough.
“Making six figures at about 30”
I suspect that if you are doing this, you don’t have a lot of free time. So you should definitely enjoy what time away from the office you do have.
“maybe demand isn’t as low as you think it is, because people ARE paying for these, pace isn’t at a frenzied pace but the buildings eventually are filling up. Honestly I think this hurts the highrise slumlords more than anything”
They are filling up- for now. As the third quarter data shows, the occupancy rate is falling. And thousands more are coming on line over the next 12 months. If they are already having to offer 2 months free rent, what happens when there are 3,000 more apartments?
Obviously, the “best” locations will have better luck. River North buildings will fill up faster than the South Loop, for instance. Wolf Point will do better than the buildings in the Loop.
I’ll be really interested to see how long it takes them to rent 690 apartments over Block 37. It’s not a “prime” location.
But I think renters will be able to get some great deals this spring. I think rents are going to ultimately fall because the 2-month “free” thing won’t be competitive enough. And some of these landlords will HAVE to fill up the buildings to pay the bills.
“The thing is, is that Commercial banks can hang on and wait a hell of a lot longer than your average consumer can, and are still probably making plenty of money at 85% occupancy, especially over $3 a sqft… thats freakin nuts”
Can they? If this is happening all over the country- in nearly every major city? (too many luxury apartments no one is renting?)
I guess we may find out in 2017.
The Fed needs to raise in December and keep raising all of 2017. The distortions of the low rates need to go away. Look at all this unneeded building. And the real estate industry isn’t able to check itself. It has overbuilt twice in the last 10 years.
“I dont see these flipping to condo’s for at least 5 years (if ever). Condo swaps would require a substantial change in consumer demand and would likely need to be self financed (Or back to the days of liar loans)”
This was my next question: will any of these buildings be converted to condos?
In a “normal” cycle, they would build the apartments and then they switch them over to condos. But this has been far from normal. They have paid record prices per unit for these apartment buildings so I don’t see how they can successfully convert them to condos, and make any money. Especially if mortgage rates continue to rise.
So they seem stuck to me.
Again, it’s a win-win for the renters.
“Making six figures at about 30”
I suspect that if you are doing this, you don’t have a lot of free time. So you should definitely enjoy what time away from the office you do have.
— This isn’t too difficult if you went to a top MBA programme. My group of friends is about at this level and do not necessary work tremendous hours. We definitely have fun outside the office that’s for sure though!
Anyways, maybe I can ask for some thoughts on here, but I am looking for a shorter lease with potential extension options. Looking at about $2,500 including utilities. Aqua is only $100 more for very flexible times (7-13 months). It’s not as ‘fresh’ anymore and the hotel concerns me, plus the location is not as trendy (but I guess there’s the new mariannos?). 73E has the best social amenities IMO (aqua has the best gym), but no balconies and no discounts that I’ve seen. MILA appears to be one of the most hip with a sick rooftop pool deck (and two months off).
My current high rise wants a 3.5% increase on a 12 month, or $350 additional each month for 6 months (with no monthly extension option). I will try to negotiate, but I’m guessing they do not care and will point to the computer screen. I would sign a 12 month, but I am not sure what my job status will be in a year and want to take a few months off to travel before my next one.
I don’t see these ever being condos–at least not the ones I toured. You get a ton of common amenities but the units are on the small side–I think it is a great way to live but I don’t think ownership demand would be as great as rental for these units.
“I don’t see these ever being condos–at least not the ones I toured. You get a ton of common amenities but the units are on the small side.”
This has never stopped them before. How big do you think the new construction condos would be?
The Sterling and the Fordham are just two condo buildings which were originally built as apartments.
“Anyways, maybe I can ask for some thoughts on here, but I am looking for a shorter lease with potential extension options. Looking at about $2,500 including utilities.”
There are like 10-20 new buildings all looking for tenants. Go negotiate. Doesn’t seem like many would turn you away.
sonies,
Yes. YoChicago is almost 100% paid content these days. The only exceptions are posts warning renters about rental service brokers.
We’re working with virtually all of the new buildings. They’ve rented up more rapidly than budgeted in their pro formas.
Expect the free rent offers to become scarcer next spring.
^LOL, comment sponsored by ???
“Expect the free rent offers to become scarcer next spring.”
Rent now or be priced out forever!
You’re right Joe, if there’s one thing people love its “unbiased” information on a webpage that’s nothing but advertisements.
Seriously who the fuck even goes to that site other than google crawler bots and sponsors themselves? Its shocking that these companies would even pay you to host to such a god awful site. Then again, marketing folks were always the flunkies, stoners and blondes at my Big Ten university if you catch my drift.
I’m sure people totally believe you when you say that you have to rent now or be priced out forever! bahahahaha!
sonies,
Got news for you – people like ads. People also like original photography and video, and if you’d actually looked at YoChicago you would have seen lots of it.
Free rent offers are far more common in the winter market in Chicago than in the spring market, when there’s far more demand for apartments. That’s just Econ 101.
The decision-makers who pay for YoChicago carefully monitor the sources of traffic to their websites and their properties, are results-driven and have to justify their decisions to people far above your pay grade.
“People like ads”
No. I don’t think so Joe.
Sure, there has been a surprising demand for these luxury rentals, but it’s also simple economics that as more and more towers go up, rent prices will stagnate / drop. This isn’t NYC , it’s Chicago. The city isn’t crawling with 25 year old millionaires willing to spend 40 grand a year on rent.
That being said – consumers are much more likely to trust yelp, curbed, or just about any site other than yo Chicago. Your site is basically a giant ad – why should I trust a paid representatives opinion on where to rent? I’d rather do my own research – and I think most people willing so spend at these price points will as well.
Riz,
Your logic dictates that renters wouldn’t search Craigslist for apartments – when that’s still the #1 place that renters look, despite the vast number of fraudulent broker ads on that site.
YoChicago doesn’t advise anyone where to rent. We give renters lots of info and they make their own decisions. Our lists link to EVERY high-rise in the areas we cover, with links to property websites and near real-time rent and availability info. There’s no better source of info about what’s actually available for rent and what prices are.
Joe, can your site keep an updated list of which buildings you feature have free months rent or other discounts? Also, listing utility dues per month, along with parking price per month would be greatly helpful. That’s a feature your site currently lacks. Thank you!
regarding name “Aurelien”, I figured out: They are reelin’ in the renters!
“Got news for you – people like ads.”
Yeah Joe, your Website is the Super Bowl of the internet
Joe Zekas–now that’s a voice I’m familiar with. I have used your site quite a bit during my apartment search last year. I understood that many of the tours/content were paid for, but that did not matter to me. Where else can I find walkthroughs of most of the layouts in MILA before even going? If in a rare instance a property is not covered much on your site, I just do the diligence myself. Anyone spending $2,500 on rent like myself will ultimately end up visiting a series of properties in person, but your site acts as a bit of a filter so I out ones with deal breakers (for me, gyms without heavy free weights which are normally not shown in promo videos, but often panned in yours).
As MikeHG mentioned, your ‘deals’ section needs some work. I know lots of these offers change, but it would be nice to have a better summary. For instance, the Loop doesn’t even have a link for some reason…
Random, but what are your thoughts on 73E vs. MILA vs. Aqua assuming equal rent and sqft.? Leaning towards the newer ones, but my love of Aqua’s architecture, much better gym, indoor swimming, high balconies, etc. still draws me to this ‘older’ 2009 building haha.
Rob:
You’re supposed to put “Sponsored Post” on those sorts of comments.
Mike HG, Rob,
Our “Deals & finds” feature could benefit from more frequent updating, especially now that free rent offers are spreading. I’ll begin to focus on that more often.
We have video walk-throughs of all of the layouts at MILA. I’ve worked with 73, MILA and Aqua, so can’t express any preference. They’re all great buildings.
“Random, but what are your thoughts on 73E vs. MILA vs. Aqua assuming equal rent and sqft.? Leaning towards the newer ones, but my love of Aqua’s architecture, much better gym, indoor swimming, high balconies, etc. still draws me to this ‘older’ 2009 building”
Why are you depending on a complete stranger to tell you where to live?
I don’t get it.
Are all Millennials like this?
“Random, but what are your thoughts on 73E vs. MILA vs. Aqua assuming equal rent and sqft.? Leaning towards the newer ones, but my love of Aqua’s architecture, much better gym, indoor swimming, high balconies, etc. still draws me to this ‘older’ 2009 building”
“Why are you depending on a complete stranger to tell you where to live?
I don’t get it.
Are all Millennials like this?”
@sabrina,
How do you know he’s a millennial? I swear people throw that word around so much. He’s asking for other’s thoughts on particular properties so that’s hardly “depending” on complete strangers. It’s harmless and some of you people, including you, need to chill out!
“Rob:
You’re supposed to put “Sponsored Post” on those sorts of comments.”
Yup, because if you find a website resourceful that automatically means they are paying you to say so… makes perfect sense!
“Why are you depending on a complete stranger to tell you where to live? I don’t get it. Are all Millennials like this?”
What benefit did this add to the conversation aside from making bold assumptions about both age and decision making processes? Anyone with the income to afford any of these places (as I said before) would have obviously toured them in person; however in a 1 hour tour, you do not get the full picture. Thus, potentially hearing a couple quick pros and cons from another source could aide in anyone’s decision. Talk to a few people online, read a couple posted reviews, post up in the lobby to chat with current residents, probe your circle of friends, etc.–all of these are sources to gather information to make a better choice. If you do NOT do all (or most) of these and invest $2,500/mo, you either better hope you are on lady luck’s side or be prepared to be a bit frustrated if things do not work out.
“you either better hope you are on lady luck’s side or be prepared to be a bit frustrated if things do not work out.”
Listen to this snowflake. These building are all practically the same. If you can’t get laid in one, then living in another ain’t gonna help you. Go visit Caracas and worry about a real problem.
The best rental I ever lived in was a courtyard building on the NW side where most of the residents were a bit more mature and underemployed due to the recession. We partied, drank, had building cookouts, drank some more, gardened, drank some more, had holiday parties…The building I lived in with a bunch of professionals totally sucked actually; few parties, most people worked all day and then were tired at night; and weekends were out elsewhere…the girls wouldn’t give me the time of day…
“If you do NOT do all (or most) of these and invest $2,500/mo, you either better hope you are on lady luck’s side or be prepared to be a bit frustrated if things do not work out.”
So you ask a Baby Boomer who has never lived in any of these buildings in his entire life which one he thinks you should live in?
It’s totally bizarre.
You’re not buying a $500,000 condo. It’s a rental. If you don’t like it, move out in a year and try another building. That’s the whole point. Apartment renting isn’t rocket science.
Sabrina et al,
Rob asked for my “thoughts” on the buildings – not for advice on where he should live, since I’d made it clear in my previous comment that I don’t give advice.
I don’t know whether Rob is a Millennial. I do know that I’m not a Baby Boomer.
Sounds like advice to me when he says “vs” in between the buildings. Aren’t you a lawyer Joe? Sure sounds like he’s asking for more than your “thoughts”:
“Random, but what are your thoughts on 73E vs. MILA vs. Aqua assuming equal rent and sqft.? Leaning towards the newer ones, but my love of Aqua’s architecture, much better gym, indoor swimming, high balconies, etc. still draws me to this ‘older’ 2009 building haha.”
Otherwise, what “thoughts” could you give?
Go look at the layouts on the website?
Lol.
What else is there to tell him?
“I do know that I’m not a Baby Boomer.”
I’m sorry Joe. I didn’t realize you are the Greatest Generation.
“I do know that I’m not a Baby Boomer.”
He’s a shabbos goy.
Sabrina,
I’ve made multiple visits to the buildings in question, and many others. I get to wander around unaccompanied for as much time as I wish. I also attend resident social events. I routinely ask residents at the buildings for their opinions, and why they chose them from among their many options. I have relationships with building and management staff that extend beyond their tenure at the buildings, and they’re more candid with me than they would be with an outsider.
I solicit the very knowledgeable opinions of many people in the industry about their buildings and those of their competitors.
I’ve been involved in this industry for many years and have familiarity with many buildings and neighborhoods.
And you’re puzzled that a renter would solicit my opinions? CC regulars don’t value knowledge, facts and experience, but other people do.
And, I’m also not a member of the Greatest Generation.
homedelete:
“Listen to this snowflake. These building are all practically the same. If you can’t get laid in one, then living in another ain’t gonna help you. Go visit Caracas and worry about a real problem.”
What if I’ve been to places more dangerous than Caracas and more countries than you can name of the top of your head? Making assumptions and calling people names on the internet, hmmm maybe you’re a Millennial, but I won’t go out making any rash assumptions though. Maybe I care more about the availability of the building’s conference rooms, gym, and amenities more than simply getting laid? Just some thoughts.
Anyways, my detailed thought process in spending $2,500/mo still would not change even though they are all fairly similar. Taking a couple hours to ask around, tour, research, etc. pays dividends. This is how the successful get ahead, apparently some on here do not understand this. Am I spending $500K on a condo, no, but I am forgoing investing in a $400K+ condo to pay rent at about the nation’s post tax earnings average… so yes, it’s quite important even if it’s just for a year. Also, moving is quite a hassle for some, maybe I plan to stay 3 years?
Sabrina/Joe:
I did ask for thoughts, not recommendations. As people all have different preferences, I had planned to make and even more informed decision based on my internal ranking system while leveraging the pool of knowledge Joe, and/or others with information outside a typical tour. Age does not play a part in communication transfer. Also there are plenty that may live in a complex, but not really get involved in the scene, luck out on a quiet or party floor, never use the amenities, etc. Therefore someone older that has never lived there, but has unique access to more unbiased information may actually be a solid source.
I will be visiting Aqua, MILA, and 73E this weekend to find out more.
The hostility and echo chamber mindset of these discussions are quite surprisingly. It appears < 10 people post 90% of the content and regurgitate the same ideas and attack anyone that thinks otherwise. It reminds me of the liberal media which had no idea how we could elect a president Trump, but that's a whole other conversation which does not fit the scope of this site. I'll let you 10 continue to chat about cribs and be on my way.
Rob:
Not me, Helmethofer. I didn’t say those things, please direct teh comments towards him.
I call BS on Joe Z for the umpteenth time it’s been called on JZ here. Of course he’s a baby boomer. His Zillow profile for New Home Notebook says “Chairman has 42 years experience” (more hilariously it says NHH lists “every .. hoe in the greater Chicago area”!) Now that’s the kind of attention to detail I want my marketeer to be focusing on!
southbound,
Thanks for catching that typo.
Only at CribChatter would someone contend that I’d misrepresent when I was born – in 1944, while WWII was still in progress, not during the postwar “baby boom.”
I would say it’ll either be a slight decline but I’m gonna put my money on “things will stagnate for 2 years”.
Most of the units going up have major backing. They’ll let the units sit before giving >20% declines in rent. That is what The Legacy did during the downturn. Other luxury buildings will do the same.
Also The Loop was listed as one of the top 10 fastest growing neighborhoods in the US was it not? I’ve lived downtown for nearly 10 years now.
The growth has completely transformed the NE corner. And now with the riverwalk the NW corner is drastically changing too.
$0.02
“The hostility and echo chamber mindset of these discussions are quite surprisingly. It appears < 10 people post 90% of the content and regurgitate the same ideas and attack anyone that thinks otherwise. It reminds me of the liberal media which had no idea how we could elect a president Trump, but that's a whole other conversation which does not fit the scope of this site. I'll let you 10 continue to chat about cribs and be on my way." Maybe you've mistaken the purpose of Crib Chatter Rob. We don't care about apartments. The only reason I'm posting about apartment buildings (and have been the last few years) is because they are overbuilding them and it's probably going to end badly- unless you're a renter. Then, you're going to get massive incentives, falling rents and it will finally be in your favor. We could care less about individual buildings. Go over to YoChicago to find info. Ask everyone you see on the street where you should live. And yes- please go look at the buildings yourself.
“I’ve been involved in this industry for many years and have familiarity with many buildings and neighborhoods.”
You’ve never lived in any of these buildings and, if it was me, I personally wouldn’t trust a 70+ year old to tell me how the party room is, who’s in the exercise room, how crowded the pool is on the weekends and whether or not it’s a “scene” or if the rock climbing wall is the bomb.
But that’s just me.
Different strokes, for different folks.
If you’re not a baby boomer and you’re not the Greatest Generation- what the hell are you??? Oh- the in between nothing generation???
Give me a break already.
The good thing about these rental buildings is that they are close to the geriatric doctors at the NW campus.
“The good thing about these rental buildings is that they are close to the geriatric doctors at the NW campus.”
Some are. That is true, hd.
But maybe that could be their market going forward? Why build 20,000 units for Millennials? Heck- build them for the Baby Boomers. They’re the ones with the money. They’re all retiring. Maybe they’ll rent a place downtown instead of buying it?
i ran into an 88 year old in the elevator at NW a few years back. said he lived across the street and was visiting his grand daughter have what was his 10th or 12 grand kid. guy seemed healthy, active and sharp. that’s the way to live. walking distance to health care, cultural events, dining and amenities. gym in the building. that to me seemed like the way to grow old. expensive sure but you can’t take your money with you when you die
“… if it was me, I personally wouldn’t trust a 70+ year old to tell me how the party room is, who’s in the exercise room, how crowded the pool is on the weekends and whether or not it’s a ‘scene’ or if the rock climbing wall is the bomb.
But that’s just me.
Different strokes, for different folks.
If you’re not a baby boomer and you’re not the Greatest Generation- what the hell are you??? Oh- the in between nothing generation???
Give me a break already.”
I can understand why you wish to remain anonymous.
I hear nursing homes these days are so expensive that people are buying month long cruises for elders for cheaper… yea, not joking
Sonies – I too have heard about this anecdotally. If an older couple has a few kids, they rotate between their children’s homes and cruise ships.
“If you’re not a baby boomer and you’re not the Greatest Generation- what the hell are you??? Oh- the in between nothing generation???”
Funny enough, you are close. There IS a generation between those two known as ‘The Silent Generation’. They are known as such because they are a relatively small population due a dip in births during the Great Depression and because they never produced a President.
“‘The Silent Generation’.”
We can only WISH that JZ was part of that generation!
I thought they were called ‘war babies’
My dad is the same age as joe and said that at least
“The good thing about these rental buildings is that they are close to the geriatric doctors at the NW campus.”
Some are. That is true, hd.
But maybe that could be their market going forward? Why build 20,000 units for Millennials? Heck- build them for the Baby Boomers. They’re the ones with the money. They’re all retiring. Maybe they’ll rent a place downtown instead of buying it?”
In 25 or so years I would absolutely consider one of these types of buildings for retirement living.
Also – – back to the monthly rent. Before I actually toured some of these buildings just out of curiosity during OHC, I didn’t get the rents. We aren’t NYC or San Francisco, but now I get it. If you have a roommate and split the $3000 / mo 2-bed rent, it costs the same as you would pay for a no-frills-sketchily-managed studio and some not-so-great location. For the millennial generation who grew up with social media and value friend time – – these are actually a much better deal than a cheaper unit in some vintage building off the red line.
“For the millennial generation who grew up with social media and value friend time – – these are actually a much better deal than a cheaper unit in some vintage building off the red line.”
Yeah but the sketchy units off the red line provide easy access to the bars and young social neighbors. half the fun of living in those northside hoods was the late nights out with the random neighbors.
Being holed up in a high rise in this part of town paying $1,500 to $3,000 a month assures that the “millennial” .. “who grew up with social media and value friend time” will be spending a lot of time on social media tweeting from their apartment…
They are called the Silent Generation because they didn’t make a lot of political noise
http://www.careerplanner.com/Career-Articles/Generations.cfm
“I hear nursing homes these days are so expensive that people are buying month long cruises for elders for cheaper… yea, not joking”
In Illinois, assisted living (which is different from a “nursing home” which is care you usually get in the last 6 months or possibly a year of your life), is about $3500- $4500 a month in the standard assisted living facility. There are some that are luxury buildings and they charge a little more.
But that being said, there are several retirees who live on cruise ships all year long. If you think about it, why not? There are doctors/nurses on board. Activities. People to talk to. The staff gets to know you.
I read an article with a woman who had been doing it for several years. She never got off the ship anymore because she had been to all the ports. When the ship docked for maintenance, she went to see her children in Florida. But she was spending like $125,000 a year and clearly was in the top 1% of all retirees in assets.
But here’s an analysis which suggests it might be cheaper than many assisted living facilities (and the food is better):
http://www.cnbc.com/2016/07/26/ahoy-matey-more-folks-retiring-on-a-cruise-ship.html
“i ran into an 88 year old in the elevator at NW a few years back. said he lived across the street and was visiting his grand daughter have what was his 10th or 12 grand kid. guy seemed healthy, active and sharp. that’s the way to live.”
What’s the average age in the Gold Coast? It has to be over 50.
Streeterville and River North trend younger- but maybe that will shift too?
I know of some people who have lived in downtown apartments for 30 years. They are aging in place. And why not? With Amazon Prime now able to deliver you your detergent and everything else, there’s no reason to move. Everything is right there. I don’t know why there isn’t a push for baby boomers to retire to some of America’s big cheaper cities instead of 90 miles outside of Phoenix or Tampa. (And yes- I get “the weather” argument.)
“Yeah but the sketchy units off the red line provide easy access to the bars and young social neighbors.”
But are there any of these left?
They are building luxury apartments right across the street from Wrigley Field right now. Seems to me that the “sketchy” units off the red line don’t exist anymore unless it’s way far north or south.
While it’s not on the Red Line, look at the Southport neighborhood. Are you just moving in and hanging out at the bars when you’re, say, 24 year old in that area now? I don’t think so. But 15 years ago- you could. Now, all the apartments have granite counter tops and the local bars are all craft breweries.
“But 15 years ago- you could. ”
That’s about when I lived in the area, so yeah, my knowledge of the rental market in that particular hood is a bit dated. But you know, the stages in life and with family and all, Mundelein seemed like the right decision for my family, at the time…
“(And yes- I get “the weather” argument.)”
It’s been a decent fall so far, but those inevitable below zero mornings just around the corner make the argument compelling. There’s a reason civilization first arose in the Mesopotamian and Mediterranean climates, and not in the cold barren north where we live…