But even more important than that is the need for a commuter hub. “These apartments have to be close to the Metra,” he says. “Once you get one mile away from a train, the rents drop precipitously, and the housing market is completely different. We wouldn't buy a property that far from a train.”

33 Realty went out to the suburbs after the flood of foreign and coastal money, especially from Florida, into the hot city market led to escalating prices. And once the firm starting looking into suburban properties, “we were pleasantly surprised at how well they were doing.”

Still, “we have a very tough time finding something we don't have to rehab.” The properties are in good condition, but “we do have a new class of renters that expects a lot more.” 33 Realty ensures its suburban units have everything its luxury apartments in the city do, including new appliances, in-unit laundry, luxury bathrooms and new kitchens.

Millard expects that, faced with rising interest rates and taxes, along with sky-high prices and rents, the apartment market in the city will undergo a correction in perhaps 12 to 18 months. But the suburbs, however, “still have a little bit of runway.”

But that doesn't mean the suburban market is wide open. “We're still buying in the suburbs,” Millard says, “ but we're not being overly aggressive. Intuition tells you not to be aggressive right now.”

CHICAGO—The rise of Chicago's market for luxury apartments is having an impact beyond the city's boundaries. Apartment managers in the suburbs are now seeing spillover effects as renters getting priced out of once affordable neighborhoods in the city seek alternatives. And that is creating a new frontier for those that provide luxury apartments.

“The renters that come to us now include many from the West Loop who say they can't afford the apartments there since companies like Google came in,” Drew Millard, principal, 33 Realty, tells GlobeSt.com. The company manages about 2,000 luxury units in the metro area, with about 300 in towns such as Des Plaines and Arlington Heights, where it now sees record-breaking rents. “The suburban prices are starting to get propped up because of these new renters.”

A flight to the suburbs is perhaps not surprising considering the rents now charged at many downtown properties, he adds. Prices within the $3.50 to $4.00 per square foot range are not unheard of, which means even a relatively small apartment can garner about $3500 per month. “That's the same as a mortgage on a nice house.”

But these new suburban renters are not just looking for somewhat cheaper apartments. “They want to live somewhere that still has the feel of a metropolitan area,” says Millard, and that means a real downtown, especially ones with nightlife, restaurants and bars.

But even more important than that is the need for a commuter hub. “These apartments have to be close to the Metra,” he says. “Once you get one mile away from a train, the rents drop precipitously, and the housing market is completely different. We wouldn't buy a property that far from a train.”

33 Realty went out to the suburbs after the flood of foreign and coastal money, especially from Florida, into the hot city market led to escalating prices. And once the firm starting looking into suburban properties, “we were pleasantly surprised at how well they were doing.”

Still, “we have a very tough time finding something we don't have to rehab.” The properties are in good condition, but “we do have a new class of renters that expects a lot more.” 33 Realty ensures its suburban units have everything its luxury apartments in the city do, including new appliances, in-unit laundry, luxury bathrooms and new kitchens.

Millard expects that, faced with rising interest rates and taxes, along with sky-high prices and rents, the apartment market in the city will undergo a correction in perhaps 12 to 18 months. But the suburbs, however, “still have a little bit of runway.”

But that doesn't mean the suburban market is wide open. “We're still buying in the suburbs,” Millard says, “ but we're not being overly aggressive. Intuition tells you not to be aggressive right now.”