Report Questions Occupancy in New Gold Coast Towers
A new video feature is raising questions about slow lease-up velocity at several recently delivered, high-cost luxury towers in Chicago's Gold Coast. The report, titled “The curious case of the Gold Coast's near-empty $1.5b towers…”, suggests that some marquee properties are struggling with absorption despite strong overall rent growth in the submarket.
- The broader downtown Chicago Class A apartment market is performing strongly, with occupancy rates reaching an all-time high of just under 94% in late 2024, rebounding from a pandemic low of 87% in the fourth quarter of 2020. - One of the most significant recent deliveries is JDL's One Chicago, a two-tower development at the intersection of the Gold Coast and River North, which added 735 luxury rental units and 77 condominiums to the market. - While the video questions leasing velocity, overall market data from 2024 showed the average price per square foot for Class A downtown apartments increased by 2.1% to $3.94, with average gross rents surpassing $3,000 for the first time. - Another major addition to the high-end market was The St. Regis Chicago, the city's third-tallest building, which was designed by Jeanne Gang and includes 393 luxury condominium residences alongside a 192-room hotel. - The new supply pipeline in Chicago is considered relatively stable compared to other major cities; as of late 2023, units under construction represented only a 2.0% share of the existing inventory. - In a sign of strong absorption for some new projects, The Reed at Southbank, a 41-story tower with 226 apartments and 214 condos, reported reaching 95% occupancy in August 2024 after opening the previous summer. - Developers are continuing to plan new projects in and around the Gold Coast, including a proposed 39-story, 368-unit rental tower from developer Newcastle Limited slated to replace a Barnes & Noble at 1130 N. State Street.
