"We literally have 50 buyers for class A properties and maybe five to 10 for class C multifamily product when they come up," says Steven H. Rubin, managing broker for Oak Brook, IL-based Inland Real Estate Sales Inc. "Everybody's buying and not too many people are selling."

Capitalization rates for class A in the strongest sectors such as Lincoln Park are often down to 6%, as apartment operators compete with condominium converters, Rubin tells Midwest bureau chief Mark Ruda. Cap rates in other neighborhoods are 8% to 9%.

Higher caps, up to 12%, may be found in older Chicago sectors such as Humboldt Park on the west side or Washington Park on the south side. "We keep scratching our heads, trying to find out what areas aren't hot yet," Rubin states.