The fundamentals look as strong as ever for multifamily in the Windy City. While some fundamentals may slow this year, the conditionals appear favorable still to landlords overall.
As things stand, the multifamily vacancy rate in Chicago's central business district is at the lowest level since 2006, according to a market report from Marcus & Millichap.
Also, deliveries have fallen below 4,000 units for the first time since 2012.
For the most part, Marcus & Millichap sees a strong 2026 for Chicago's multifamily sector.
With construction estimated at just 3,900, completions are only expected to widen inventory by 0.5 percent in 2026. According to Marcus & Millichap, this would tie the city with six others for the fifth smallest estimated multifamily inventory increase.
With supply pressures waning, the brokerage thinks that investment interest will only improve this year— especially along the North Lakefront-Rogers Park corridor.
"Here, strong lifestyle amenities, transit connectivity, and a slowing construction pipeline are set to support near-term fundamentals," Marcus & Millichap noted about the area.
Notably, transactions valued at more than $20 million picked up in 2025, thanks to strong rent performance among Class A properties.
The one area that could lead to some issues is the slower expected hiring, with Marcus & Millichap projecting that 13,000 jobs will be added in 2026, down by 0.6 percent from the long-term average.
"Slower hiring impacts household formations, a dynamic that will push vacancy higher in 2026," Marcus & Millichap projected.
"Still, the year-end rate of 3.8 percent is 200 basis points below the metro's long-term average."
An area where vacancy could pick up is Lake County-Kenosha, which is set to receive the most deliveries this year, according to Marcus & Millichap.
Also, rent growth is expected to slow by 2.9 percent and reach $2,300 per month. This is compared to the combined 50 percent boom seen from 2020 to 2025.
"Moving forward, investor interest should continue to strengthen as supply pressure eases amid historically tight vacancy, bolstering property performance metrics," Marcus & Millichap concluded.
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