Projected Low Apartment Completions Signal Significant Rent Growth Potential for Chicago's Multifamily Market

Many multifamily investors over the past year have discussed the potential for outsized rent growth in 2025, 2026, and 2027 due to historically low levels of new apartment construction expected to be delivered over this time.

We are finally gaining insight into what 2025-2027 may look like for new construction in the multifamily market.

Chicago New Apartment Starts and Projected Completions

CBRE, a national commercial real estate services firm, published a report earlier this month on Chicago apartment completions of 50 units or more.

Chicago averaged 4,149 units delivered per year from 2013 to 2024 for buildings of 50+ units.

Based on new construction projects that have broken ground, CBRE’s estimates for unit completions over the next few years are:

• 2025: 0 units

• 2026: 308 units

• 2027: 635 units

Multifamily is driven by supply and demand.

From 2015-2022, the Sun Belt boomed as a result of demand outstripping supply.

Now in 2024, we are on the verge of the supply of new apartments becoming virtually nonexistent in many markets due to high interest rates and high construction costs.

The severe drop-off in new supply in 2025-2027 bodes extremely well for owners of existing multifamily properties across the country to experience potential outsized rent growth and occupancy.

Chicago’s supply pipeline continues to be one of the lowest in the country, ranking at the very bottom of the top 20 markets as a percentage of existing stock (1.2%). Chicago is not alone, though, as the rest of the country is experiencing a very similar drop-off in new supply.