Well, it looks like we may have ANOTHER apartment building in the works in Chicago. The new owners of 203 N. Wabash have recently applied for permits to convert their east loop office building into a Class A Apartment building. Apparently the frenzy of developers jumping on the apartment bandwagon continues. How many units does this now make?
Well, 203 N. Wabash has yet to obtain financing for this project and are still awaiting results from the city to see if the zoning change will be allowed (more than likely it will). However currently there are 1,400 apartment units under construction with another 6,000+ units in the planning stage according to Crain’s Chicago Business. Now, it is obvious that not all 6,000+ additional units will hit the project because not all the developers will be able to obtain financing. However, while credit is tight overall, it is much easier to obtain financing for these new projects as everyone and their mother now want to be part of the Apartment Boom.
What does this mean for the future? Current developers still think the rental demand is sustainable and are still betting on high single digit rent increases for the coming years which begs the question: “haven’t they learned anything from the crash a few years ago?”