CHICAGO—In 2016, developers will probably continue their recent focus on creating luxury developments, and push many renters to seek older class B communities that offer similar services and amenities at a more affordable price.

"Today's class B apartment is yesterday's class A apartment," Peter Vilim, co-founder of Waterton, tells GlobeSt.com. For decades, his Chicago-based company has been taking over top-of-the-line, but slightly older properties, and adding little touches and updates. "That effectively delivers a class A experience in a building considered class B due to its age."

And the gap in rents between the two classes is still so wide in many markets that there is a tremendous demand for what is seen as well-located class B communities. Vilim estimates that nationally, effective rents at B communities hover nearly 30% below those of A, making them especially appealing to millennials and other cost-conscious renters. "A B unit is hundreds of dollars less per month than an A unit, even one that is right next door."

In the first half of 2014, he adds, that cost gap helped push the class B vacancy rate below that of A communities. "You see that much more in these downtown core areas; anywhere there is a high density."

Stephen Rappin, president of Evergreen Real Estate Services, partially attributes this shift to the new class A supply that's come online. However, he also believes that the relative affordability of B communities has had an impact, along with a lack of new construction in this segment and increasing demand from younger, more price-sensitive households. "A substantial portion of the rental demand is from millennials moving out of their parents' house and renting for the first time. They may be able to afford class A rents in a few years, but for now it is out of reach."

Officials from RMK Management Corp. have also seen millennial renters increase at many of its class B communities. "The reasons for selecting an older property vary, but cost is often the deciding factor," says Diana Pittro, RMK's executive vice president. "By leasing an apartment in an older building, renters can live in neighborhoods they might not otherwise be able to afford. And because many class B properties are newly renovated, they include features similar to those of newly constructed class A buildings."

"And frequently the older buildings occupy better locations," Vilim says. "This is a very smart, very well-educated demographic," and many realize they can pay class B rents and occupy units that "look and feel like class A."