Coronavirus Is Sending Luxury Rental Markets on a Rollercoaster Ride
Steve Fifield was quoted by the Wall Street Journal discussing the Coronavirus impact on Chicago’s luxury rental market. To see the full article, follow this link.
“Chicago’s top buildings rarely offer concessions in the spring, said Ericka Rios, director of leasing at the Downtown Apartment Company, which finds tenants for 192 downtown high-rises. However, in new buildings, like Messrs. Zawitz and Gonzalez’s home, concessions have been uncharacteristically generous.
“For new leases, I have seen one month or two months free on a 14- to 15-month lease, and three months free for an 18- to 24-month lease. It’s very unusual,” said Ms. Rios.
Chicago’s luxury-rental segment is relatively healthy, according to both Rental Beast and RealPage data: Rents and concessions are roughly flat compared with last year. But tall—and super-tall—buildings in “lease up,” in which owners of new buildings seek their first renters, are motivated to make special deals.
Steve Fifield, chief executive of the Fifield Companies, a Chicago-based real-estate company, said when the virus hit, his company was in the final stages of lease-up at 727 West Madison, a 45-story, 492-unit apartment tower in the West Loop that opened last year. Rents range from $1,800 for a studio to $9,000 for a penthouse.
Mr. Fifield said his company is eschewing the practice of offering new tenants a month of free rent, and instead simply lowering the monthly rent by an equivalent amount on some units—roughly 8% to 10%. “Renters are not dumb” and can do the math, he said.”