The real estate market continues to see a surge in multifamily development, mostly due to the overall economic context and the renters’ positive attitude towards renting. People are increasingly drawn to this liberal way of life as it provides more flexibility and the ability to move freely to a different city or state whenever a job opportunity comes along.
According to a National Association of Home Builders (NAHB) report, the multifamily market has recovered substantially since the end of 2010 and now stands at about 70 percent of the way back to a sustainable level. The multi-housing sector is expected to continue on the recovery path as new household formations generate demand, especially in the market-rate rental segment.
As a leading Midwest apartment market, Chicago keeps ahead of this national trend, with vacancy expected to slip 20 basis points to 3.6 percent in 2013, real estate tracking data shows. Roughly 80 percent of new market-rate rentals slated to come online in 2013 are in the City of Chicago as developers strive to keep supply and demand in balance.
Class A properties will continue to generate positive results, including an increase in rental rates which is favorable not so much to the city’s renters but definitely to the economy. Asking rents will rise 4.0 percent to $1,141 per month in 2013 and, based on research from Marcus & Millichap, effective rents will also climb to $1,072 per month.
As a top performing submarket, Chicago’s downtown attracts major investors, including Bluerock Enhanced Multifamily Trust more recently, a New York-based non-traded real estate investment trust whose primary focus is on acquiring well-located, institutional quality multifamily properties with strong and stable cash flows.
Joining forces with the building’s owner, Village Green, BEMT purchased an interest in MDA City Apartments, a stable, well-occupied, core urban infill project located at 63 E. Lake Street in downtown Chicago. The class “A” high rise comprises 190 units and 8,238 square feet of ground floor retail within a 24-story building. The property offers a variety of floor plans ranging from studios to one and two bedrooms. In addition to the stunning views, community amenities include a sky park, a rooftop hot tub, outdoor pool, on-site restaurant/bar, ground floor retail services, guest suites, and dry cleaning pick-up and drop-off.
Images courtesy of bluerockre.com.