Economic effects of the COVID-19 pandemic continue to impact apartment fundamentals in Chicago. In fact, the apartment market performance in the Windy City has been among the nation’s weakest over the past year. After reaching a three-year high of 95.7% in August 2019, occupancy in Chicago has fallen 200 basis points, landing at a February 2021 rate of 93.7%. That was the lowest rate the market has seen in more than 10 years and was one of the softest among the nation’s 50 largest markets. With occupancy weakening, Chicago operators have resorted to rent cuts. Effective asking rents were cut 5.3% in the year-ending February 2021. That was one of the steepest reductions the market has seen in at least 20 years and was one of the deepest cuts among the largest markets nationally. However, even in good times, Chicago does not generate much price appreciation. Annual growth in effective asking rents in Chicago averaged 2% during the five years leading into the pandemic.
