Apartment Concessions Hit 12-Year High
The rate of apartment concessions in the U.S. has reached its highest level in 12 years. This national trend suggests that even operators of premium properties are increasingly using incentives to maintain absorption rates and occupancy during the shoulder months of the leasing season.
- The national surge in concessions is largely a response to a boom in apartment construction that has increased supply and slowed absorption rates, compelling property managers to offer incentives. - While the national trend is driven by oversupply, Chicago is experiencing the opposite: the steepest decline in new apartment construction of any major U.S. metro, with new unit openings projected to fall by 60.4%. - Chicago's multifamily market fundamentals remain strong, with a vacancy rate of 4.7% in late 2025, significantly tighter than the U.S. average of 8.4%. The lack of new supply is expected to keep vacancy rates low, with 2026 deliveries predicted to be the lowest since 2012. - Landlords often prefer offering concessions to lowering base rents to protect a building's overall valuation for financing purposes; maintaining a higher gross rent on the lease is a strategic decision. - In Chicago, concessions are highly seasonal and most prevalent during the slower fall and winter months to boost leasing activity before the peak season, which runs from March through September. - Common incentives in the Chicago market include one to two months of free rent or waived administrative and move-in fees, often as part of "look and lease" specials for prospects who apply within 24-48 hours of a tour. - Nationally, Class A properties like those in the Gold Coast offer the most significant average discounts at 11%, though Class C properties are the most likely to have some form of concession available. - The average rent for an apartment in the Gold Coast neighborhood was $2,519 as of early February 2026, which represents a 4% increase compared to the previous year.
