'Clicking On All Cylinders': Chicago Multifamily Sales Up 117%
The Chicago commercial real estate investment market is off to a fast start in 2026.
Sales volume rose 42.8% year-over-year to just over $4B in Q1, driven by a flurry of multifamily deals, according to an Avison Young Q1 investment sales report.
Investors spent about $1.9B on Chicagoland multifamily properties to start the year, a 116.6% increase from Q1 2025 and the second-most of any U.S. market, behind only the New York metro area.
“Chicago ranks so highly compared to other markets because in the multifamily world, it's really clicking on all cylinders,” said Jim Hanson, principal in Avison Young’s capital markets group.
Hanson said there has been a significant uptick in multifamily sales in the suburbs, and that not only are there more deals — 58 in total in Q1, up 31.8% year-over-year — the deals that are trading are larger complexes at higher valuations.
Just this month, a 15-story, 1,115-unit multifamily high-rise at 5441 N. East River Road in O’Hare sold for $167M in the year's priciest apartment deal so far. In January, a 42-story tower just off of Michigan Avenue downtown traded for $126.1M.
Chicago’s multifamily supply and demand dynamics also favor investors.
Multifamily vacancy rates in Chicago are among the tightest in the country at 5.1%, trailing only New York and the San Francisco Bay Area. The Windy City has just 1.6% of its current inventory under construction, and many CRE stakeholders don’t envision cranes filling the sky anytime soon.
“What's happening now is both institutional equity and debt are looking at Chicago and saying, ‘Boy, there's still some headline risk here. We're still worried about some things, but those fundamentals are fantastic. We can't get those in any other market,’” Hanson said.
The city’s tax environment has long topped the list of stakeholder concerns about Chicago’s long-term challenges. But newly elected Cook County Assessor Pat Hynes is set to take office next year, and the perception is he is friendlier to commercial interests in the city, Hanson said.
As part of his campaign platform, Hynes pledged to create a new public-facing department within the assessor's office called the Department of Economic Development, which will partner with aldermen and suburban mayors to offer transparency in the assessment process for new projects.
“Most folks would think that in the last eight years, the property tax system has been a lot more exciting than it should be, and so we're going to make it boring again,” Hynes said at Bisnow’s Chicago Office Summit this month. “We're just going to go back to fundamentals and move our assessments in a predictable and slow, methodical fashion, just like the market.”
As multifamily rents have continued to grow quarter-over-quarter, the economics of deals have become strong enough where investors are more comfortable with the uncertainty in the real estate tax environment, Hanson said. There's enough growth in revenue that whatever happens on the tax side, investors are betting that their top lines will grow faster.
“Right now, people are looking for reasons to say yes to Chicago,” Hanson said.
That sentiment extends beyond just apartments. Chicagoland industrial sales topped $1B for the quarter across 68 deals. The total dollar amount was up 42.8% even though the number of deals fell 21% as industrial properties traded at higher values. Chicago has the lowest industrial vacancy rate of any of the top 15 metros, according to Avison Young.
Retail deal volume was at roughly $513M, down 18.9% compared to last year’s first quarter, and office transaction volume was at about $466M, up 11.2% year-over-year.
