"Competition from the private sector was very intense throughout the year because of extremely attractive financing rates," says Crocker, who expects his replacement to be named by March. However, those same financing rates continue to put a crimp on multifamily sales, he adds.

The wide bid-ask spread has shifted from capitalization rates to collection forecasts, Crocker explained during an earnings conference call. When that spread cannot be overcome, sellers take their property off the market, often refinancing.

Crocker, among the first to predict the stall-out of the once-roaring multifamily rental market, is bearish on the economy, as well as his industry's prospects. "I believe the economy will be stubborn in its recovery," Crocker says, despite a record-low federal funds rate, lower energy costs and tax cuts.

Besides foreseeing an unemployment rate rising to 6.5%, consumers already are weighed down by debt, Crocker explains. As a result, some renters are doubling up or moving home, he adds, while potential renters are reluctant to leave home, he adds. Meanwhile, those successful in the job market are more likely to opt for home ownership, Crocker says, taking them out of the higher-end rental market his firm serves.

The industry continues to see concessions, which for Equity Residential, added up to $4.7 million last year, up 20% from 2000, says chief financial officer David Neithercut. Meanwhile, occupancy dipped to 93.9% across the 224,335-unit portfolio.

Funds from operations were up 4.8% for the fourth quarter to $0.66 per share, and 5.2% for the year to $2.63 per share. However, the market shared Crocker's gloomy outlook, as the REIT's stock price dropped 3.11% to $26.14 per share Wednesday.

With eight properties totaling 3,740 units, the Chicago market produces 1.8% of Equity Residential's net operating income. Locally, Equity Residential's developments in progress include the 403-unit, $67.1-million Highlands of Lombard in that west suburb, scheduled for completion in the third quarter next year.

Meanwhile, Crocker's predictions last year about the Chicago market have been borne out. "Downtown Chicago is awash with condominium properties," he notes. "These properties will not be sold and will be thrown into the rental pool."

Vacancy rates will rise to the 8% to 10% range in a previously tight market, predicts Crocker. However, concessions of up to two months already are being seen Downtown, and are spreading to the suburbs.