It predicts metrowide occupancy will fall to about 93% by year's end, as jobs losses continue with an estimated 51,000 cuts in 2009 and 2,230 units are expected to come online. Despite this, the report projects asking rents will climb nearly 2% this year.

Ralph DePasquale with Hendricks & Partners says he doesn't expect significant losses to occupancy this year and that the market has already seen the bottom.

"Overall the market is operational and holding up fairly well," he tells GlobeSt.com. "Landlords saw some effects from job losses, but last fall we really saw the numbers drop from mid- to low-90s in occupancy. That's about where we still are right now overall, and I think it should hover right around there going into the rest of 2009. It's all going to be related to jobs as the driving factor, but what we see is things being fairly stable from this point forward."

DePasquale says the stunted development that comes with tight capital markets will provide a strong base for the market in the future. "In the next year, I think we're still seeing very little development and nothing of any major impact," DePasquale says. "We're not seeing significant development, so that's going to bode well for us because there's not going to be a supply and demand issue; just demand. Less development will help occupancy and overall operations long-term."

Hendricks & Partners predicts rents will likely see little to no growth or declines. "We may see a little more in the way of concessions, which effectively lowers the rent a little, but we won't see as much in actual rent reductions," DePasquale says. "From an investment standpoint, Chicago and the suburbs are still in strong demand, but in terms of buying, capital markets are still adjusting. We're going to see a period of time when some of the agencies adjust their underwriting parameters and make more capital available. Market demand is still there, it's just a matter of finding capital."

Marcus & Millichap research concurs that some multi-family assets, specifically those in the western suburbs, will elicit strong activity from buyers.

"Solid fundamentals in suburban Class B/C apartments will likely attract investors in 2009," says Greg LaBerge, regional manager of Marcus & Millichap's Chicago office. "Demand for well-located lower-tier properties in the Downers Grove and Woodridge/Lisle submarkets is anticipated to increase, with traffic congestion luring renters closer to employment and transportation corridors."