Apartment Development Stays Strong as Rents Climb

Uptown LaGrange, a new development by Opus in suburban LaGrange.

CHICAGO—Apartment developers throughout Chicagoland remain quite aggressive, and will complete about 8,300 new units by the end of the year, well above the 15-year average and just slightly less than 9,000 units built in 2016, according to a new market report from Marcus & Millichap.

And developers will probably maintain that robust pace into 2018, the firm believes, especially when it comes to luxury units around the urban core. All these completions, however, will put some upward pressure on vacancy rates. That in turn will lead landlords to begin making more concessions, particularly in the class A segment. But with business confidence and job openings at near all-time highs, strong rent growth should continue, even with the increase in vacancy.