Chicago’s Class A apartments – resilience during the last downturn

Despite the recession’s impacts, Chicago did not fall as far and recovered more quickly than most major markets

July 21, 2020
Occupancy decline (peak - trough)   |  2.1 average percentage point decline
Effective rent losses (peak - trough)  |  6.4% average decline
Rent growth (trough - current)  |  27.5% average rent rebound
  • In the last cycle, Chicago’s Class A occupancy peaked at 92 percent.  That was at the end of 2007

  • The Great Recession resulted in 266,000 Chicago jobs lost between 2007 and 2009, or 5.6 percent of the job base

  • This slowdown resulted in occupancy declining over the next quarter to hit 89.7 percent at the beginning of 2008

  • This 2.3-point drop was in line with most markets and not as serious as what Seattle, Phoenix, or the Bay Area saw

  • These softer Chicago conditions did cause effective Class A rents to retrench.  It took 6 quarters for Chicago to hit bottom, compared to 7 to 13 quarters for several major markets.

  • From this peak to trough, Chicago lost 3.6 versus 6.4 percent for the major markets.  This made Chicago one of the most resilient markets with only a $72 drop in monthly effective rent.

  • It took until early 2011 for Chicago rents to recover to their prior peak.  While 5 quarters may seem long, many major markets took 13 to 18 quarters.

  • Led by its stronger economy, 2011 saw Chicago rents rebound before most markets.  Since bottom, Class A rents are up 23.2 percent, only slightly behind the average of the major markets.