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CHICAGO-Downtown multifamily rental occupancy has entered territory not seen since the late 1990s, according to CB Richard Ellis and Appraisal Research Counselors, moving up 1.6 percentage points to 96.8%. Meanwhile, suburban multifamily rental building owners have seen occupancy rates rise to 94.3%, a slight decrease from the previous quarter but slightly higher than the third quarter of 2004.

Less new construction and continued condominium conversions have pushed occupancy rates higher, according to the two firms, which have eliminated the need for concessions at many properties. Although 1,260 new units will be delivered this year, that figure is 26% below average for the previous 10 years, according to researchers. In addition, they note an average year sees 1,000 Downtown rental units converted to condominiums, but as many as 5,000 could go condo this year. CB Richard Ellis adds another 1,000 units in the suburbs could become condominiums.

CB Richard Ellis notes the 548-unit Shoreham project in Lakeshore East as well as the 190-unit MDA Chicago City Apartments have done leasing without concessions, while The Bernardin in River North not only has eschewed concessions, but is commanding rents of $2.43 per sf.

“Overall, our outlook on the conditions of the Chicago rental market remains bullish,” say CB Richard Ellis vice presidents Dan Cohen, John Jaeger and Melissa Strauss.

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