Transactions Shifting to the Suburbs

The Chicago suburbs have seen a surge in institutional dispositions – totaling more than downtown and neighborhood volume combined. This is a stark change from 2016, when downtown transactions comprised a strong 49% of the volume.

Downtown deal volume decreased by 37% in 2017, while suburban volume increased by 28%. . In dollars, 2017 Suburban deals totaled more than $1.4B, but downtown deals fell to $1.1B. However, this was not due to a lack of supply: We estimate that more than 2,800 downtown units were brought to market in 2017 that were unable to go under contract.

Investor interest has also risen in the neighborhoods. When looking at transactions greater than $10M, neighborhood deals have increased 175% from 2016 to 2017. In 2016, these transactions accounted for 5.5% of transaction volume; they now account for 12% in 2017.