The improvement came despite the loss of 26,510 jobs in 2003, the third straight year of losses that have added up to more than 125,000, according to the company's report. Also, 1,325 rental units were delivered in 2003, the report adds. "2003 was a pretty good year for the rental market with all the things going against it," Jaeger says.

This year is promising, then, because the only building coming on line is the 274-unit Jefferson Place in the West Loop. "It will be a breather type of year," Jaeger says, impressed with Steve Fifield's project at 180 N. Jefferson St. "This will be a good development for the West Loop, which hasn't seen new development since Presidential Towers in 1983."

However, there is a "hidden market" of 877 condominiums that are listed on the Multiple Listing Service of Northern Illinois as rental units, Jaeger notes. "This is the size of two good rental buildings," Jaeger points out. "This is affecting a lot of buildings." Some condominium buildings have rental offices on site, where leasing agents are handling units bought by investors and speculators, Jaeger adds.

Looking ahead, Magellan Group has started work on the first rental building in the $1-billion Lakeshore East project, which will add 549 units to the market. However, Jaeger reports 40% of the units already have been leased. Also in 2005, McCaffery Interests is building 171 units at 747 N. Wabash Ave., while Village Green is converting the office building at 185 N. Wabash Ave. into 192 apartments.