New Interest Rates for Chicago - Time to Update Your Lease

On December 31, 2009, the City of Chicago announced the security deposit nterest rate for all 2010 leases subject to the Residential Landlord Tenant Ordinance ("RLTO").  The new rate is .073%.  It is important that landlords update their lease forms to reflect proper disclosure of the new rate to be in full compliance with RLTO.  Failure to comply can expose a landlord to significant liability.

Consult with your own legal counsel to learn more or contact a Rent Smart agent for a reference to an attorney familiar with these matters.

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Eviction suit hits Sudler Sotheby's

By Andrew Schroedter, Oct. 28, 2009

In the latest controversy to befall Sudler Sotheby’s International Realty, a landlord has sued to evict the residential brokerage from its offices in the historic Palmolive Building, saying the firm owes nearly $371,000 in rent.  A venture owned by Beverly Hills, Calif., investor Ross Hilton Kemper filed a complaint Monday in Cook County Circuit Court, asking a judge to order Sudler’s parent company, Chicago-based McNair Inc., to surrender its third-floor office in the Art Deco tower, 919 N. Michigan Ave., and pay the past-due rent.

The lawsuit is the latest setback for Sudler, which acquired rival Century 21 Sussex & Reilly in February. The deal boosted Sudler’s marketshare but resulted in broker defections, a lawsuit by a top-ranking Sudler executive and a rent dispute over the former Sussex office in the Roscoe Village neighborhood.

Sudler CEO Sergio Martinucci expressed surprise at the lawsuit, saying the firm pays rent every month.

But he acknowledges that the company has been withholding a portion of its rent each month because he says the landlord, Michigan Avenue Retail LLC, has failed to live up to a promise to increase the size of the Sudler sign on the building, where Sudler leases 9,938 square feet.

“They won’t give us what they promised,” Mr. Martinucci says. Therefore, “we’ve been paying what we feel is our proportionate share of the rent.”

The eviction complaint was filed by Michigan Avenue Retail, which Mr. Kemper owns. A spokesman for venture had no comment. The venture’s attorney, David Saltiel, a partner in the Chicago office of law firm K&L Gates LLP, also declined to comment.

Under a 10-year lease that began in September 2006, the firm’s annual rent is $332,426, or $33.45 per square foot. Sudler has closed offices this year in Hyde Park and Bucktown. The company has four North Side offices, including the one in the Palmolive Building.

While Sudler is seemingly going through a particularly tough amid time the sharp slowdown in residential sales, they are not alone, says Jim Kinney, vice-president of luxury home sales at Chicago-based Baird & Warner Inc.

"Everyone is being affected by the downturn in the market," he says.

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Rubloff Is Acquired by Prudential Preferred

One by one the giants of Chicago's real estate industry are disappearing.  Today, Prudential Preferred Real Estate acquired  Rubloff Residential combining the two companies to form Prudential Rubloff.  What's driving all the consolidation?   The economy and the real estate slump have forced the companies to trim costs by combining forces and expanding the volume of transactions processed.  This makes the third large acquisition in the last year.  First Sussex and Reily was sold and then just last week Koenig & Strey was purchased.  Stay tuned.  More sales, consolidations and liquidations are likely.

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Koenig & Strey Is Sold!!!

Chicago real estate firm Koenig & Strey has been sold to a firm controlled by Warren Buffett's Bershire Hathaway.  Here is a link to the story at Crain's Chicago.  This comes after Koenig recently closed numerous Chicago offices after encountering a huge drop in it's sales volume.

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Chicago Tribune Declares It's a "Renter's Market"

Today's business section of the Chicago Tribune declared its a "Renter's Market" in Chicago.  Here's a link to the story in case you missed it.   "Landlords are lowering rents as they try to fill vacancies and cover their costs."  In short, citing research from DePaul University's Institute for Housing Studies, the paper announced that vacancy rates have increased significantly throughout the city putting pressure on the smaller landlord.  Rising unemployment is cited as the biggest reason, although the DePaul study also says that  the best renters are being lured into the sales market by historically low prices and the government's $8,000 tax credit.

What's a landlord to do?  Hire Rent Smart , of course.  Our company can make sure that you are on the right side of the statistic's cited by the Tribune.  What could be worse than holding a vacant apartment going into the winter months?  A single month vacancy let alone several months can wipe out a year's return on a building.  Avoid that drastic result by consulting the experts.  Rent Smart will give you an honest evaluation of the rental market for your property and will set a price that will bring you the tenant.  Results.  Nothing else matters and Rent Smart is equipped to deliver.  We have five offices staffed with 125+ agents ready to start working for you today.  Call us and we will get started.

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Get Paid for Your Trash - Chicago Launches New Recycling Program. Will It Work This Time???

Chicago has struggled in recent years to launch a sustainable recycling program.  We can all recall the 'blue bag" program that required residents to buy their own bags in order to recycle.  That went nowhere and was then replaced with the "blue bins" that also seem to be largely ignored if they can be found at all.  Thus, it's not surprising that the city is making another attempt.  This time is just might work.  Why?  Chicago is going to try a new tactic  - paying you by the pound for your recyclables.  Yes, that's right,  the city proposes paying you for your trash!

Chicago has contracted with RecycleBank to test a recycling program with 10,000 south side households.  The program will work like this:  for every pound  of trash recycled, a household will receive points from RecycleBank which can then be redeemed on the company's web site for gift cards and discount cards at participating retailers.  RecycleBank estimates that the value of the points offered to the local community could exceed $500,000 for new business injected back into the local economy from trash.  The program launched August 1, 2009 and covers the 5th, 8th and 19th Wards of Chicago which include the Beverly, Beverly West and Mt. Greenwood neighborhoods.

Let's hope this third attempt at recycling in Chicago actually works.  The initial prospects look good.  If the City can save money by recycling and its residents see a direct benefit too, then the program stands a good chance.  For more information about the program, contact RecycleBank or Rent Smart .

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Mortgage Lenders Have Your Money - $18 Million in Cook County

Today it was reported in the Chicago Tribune that Cook County Circuit Court Clerk is holding $18 Million for 1,900 people who have had their homes foreclosed over the past year.  How can this be?  Well, prior to the real estate bust, when home prices were still stable, homes sometimes sold at foreclosure auctions for more than the amount due to the mortgage lender on the loan.  If the homeowner did no step forward in the lawsuit and claim the money, those funds were then turned over to the Cook County Circuit Court for safekeeping.  You can search the Clerk's online database at www.chicagotribune.com/default or call 312-603-5030. See the complete Tribune story here: http://www.chicagotribune.com/news/local/chi-englewood-foreclosureaug25,0,1445727.story

A few words to the wise: Never pay anyone to recover money on your behalf.  There are plenty of scammers that just want a cut of your money.  When you are due money from the state, county or city, ask for help   at the place where your money is held.  Most are helpful in helping you complete any paperwork required o get your money returned. Check out the State Treasurer's Tips of Dealing With Finding Firms.

Search the State of Illinois' database for unclaimed funds at Cash Dash and follow the online instructions.  State Treasurer Giannoulias is holding millions of dollars in unclaimed funds.  At the linked site you can search for your name or that of someone you know.

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Rents May Be Recovering Downtown

Downtown apartment rents, occupancies rise

By Alby Gallun, Aug. 24, 2009

(Crain’s) — It’s the worst of times for many real estate investors, but downtown apartment landlords can’t complain about much.

Rents and occupancies at top-tier downtown apartment buildings rose for a second straight quarter, bucking the downward trend of the broader real estate market, which has been battered by the recession and credit crisis. Leery of the lousy condominium market and possibly uncertain about their own economic futures, many downtown residents are choosing to rent rather than buy, boosting demand for apartments.

The average effective rent at Class A downtown buildings rose to $2.17 a square foot in the second quarter, up 2.4% from the first quarter, according to a report by Appraisal Research Counselors, a Chicago-based real estate consulting firm. Effective rents include concessions such as free rent.

While that’s still down 4.8% from the year-ago period, it’s a positive sign for an apartment market that usually takes a hit during recessions.

“All things considered, it’s not a terrible place to be right now,” says Appraisal Research Vice-President Ron DeVries.

The average Class A occupancy also rose for the second consecutive quarter, to 93.4%, up from 90.9% in the first quarter and 91.6% in the year-ago period.

The numbers would be even stronger if it weren’t for all the new apartment buildings on the market. Developers have built 2,098 apartments downtown since early 2008, and the so-called shadow rental market is growing as more condo owners, unable to sell their units, rent them out instead.

Demand for apartments, meanwhile, normally tracks closely with the job market, which has been awful. Chicago-area employers have cut more than 200,000 jobs in the past year.

But other factors may be playing a larger role in the current market. Many would-be buyers are renting instead either because they’re worried about condo values falling further or because they can’t get a loan to finance a condo purchase. Others may be nervous about taking on a mortgage given the state of the economy, says Greg Mutz, CEO of Amli Residential Partners LLC, a Chicago-based apartment owner.

“People are worried about their jobs,” he says. “When you’re in that kind of mind-set, you don’t want to be illiquid, and you want to have flexibility.”

The apartment market is “not as bad as I thought it would be,” he says.

Amli completed construction last year on a 440-unit building at 900 S. Clark St. While the high-rise is more than 80% leased, it faces competition from other new buildings in the South Loop, where developers have been especially busy.

Compounding the supply problem, Chicago-based developer Centrum Properties Inc. recently decided to convert a new 342-unit condo project at Roosevelt Road and Clark Street into apartments.

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Security Deposits - Why They Are Disappearing in Chicago

If you live in Chicago and you have rented an apartment recently, you may have noticed the fact that more and more landlords are not requiring security deposits.  In fact, most large managed apartment buildings have done away with deposits altogether.  What is behind this trend?

Certainly, it could be that Chicago landlords recognize the dire economic times we all live in and are loosening their requirement out of a well-placed sense of rental brotherhood.  Do you buy that?  Didn't think so.   Then what is behind it?

The answer: LAWYERS.  Yes, that's right, for once, law firms are on the side of the little guy.  Chicago lawyers have identified the Chicago Residential Landlord Tenant Ordinance ("RLTO") as a perfect tool to go after the deep pockets of landlords recovering thousands of dollars for their clients while pocketing a little for themselves in the process.  RLTO places significant burdens on Chicago landlords when it comes to security deposits.  Among the requirements are that the landlord give a proper receipt for any security deposit that it accepts, that the deposit not be co-mingled with the landlord's money, and that the deposit be returned or properly accounted for upon lease termination.  As easy as it seems, landlords are having difficulty following RLTO and the Court in Chicago have been unforgiving in their strict enforcement.  The result is that many landlords have been faced with large judgements and class action claims that threaten their bottom line.  

In response, many landlords have chose to drop the requirement that tenants post a security deposit altogether.  This is a windfall for Chicago tenants.  No longer will tenants be required to come up with an extra month or sometimes two months for a security deposit freeing up substantial amounts for other needs.  Deposits are often replaced with nonrefundable "move in" or "processing fees" which may or may not be returned to the tenant or credited against the rent due.  These fees average about $250, but can vary widely.

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South Loop Office Opening October 1, 2009

Yes, we are growing again.  Rent Smart is pleased to announce that we are opening of fifth office on October 1, 2009.  The new office will be located at 2000 South Michigan Avenue in the South Loop in the historic Locomobile Lofts building.  We are excited that we will now have a new presence in this area to better serve our clients.  We welcome you to stop into our new office to say hello.  And, of course, if you are in the rental market please keep this location in mind.  We are here to serve all of your rental needs.

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Real Estate School Is Starting August 27, 2009. Enroll Today - It's FREE for Our Agents.

Rent Smart has partnered with the Chicago Real Estate Institute to offer the pre-licensing salesperson course beginning August 27, 2009.  CREI is one of the most respected and established real estate schools in the Chicago area.  The classes will be held at Rent Smart's office located in West Town at 1900 West Chicago and at the corporate office located in Edgewater at 5650 North Broadway.  The course will be taught exclusively by Chicago attorney Thea Pazen .  Thea takes great pride in making sure that all of her students exit the course with the knowledge required to not only pass the state examination but also garner the tools required to launch a long and successful real estate career.  We are proud to offer the course to our agents FREE OF CHARGE because we are committed to having all of Rent Smart's agents licensed as sales agents to better serve our growing client base.  

If you are interested in becoming a licensed agent, please contact Anna at our corporate office at 773-275-2700 to learn more about enrolling in Rent Smart's next course and joining our team. Learn more about CREI at www.ChicagoRealEstateInstitute.com 

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iGo Car Sharing Partners With Rent Smart

Wow! What an opportunity.  Rent Smart has partnered with iGo Car Sharing to offer our mutual customers great benefits.  Existing iGo member get $100 their first month's rent when they present their membership card upon first contacting a Rent Smart agent.  Not a member?  No problem - Rent Smart will purchase a 1-year membership for you upon signing a lease.  Check out all the benefits of the iGo Car Sharing program at www.iGoCars.com

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Setting The Stage For Quick Rentals - Staging 101

The subject of home staging has seen a recent surge of interest, due in part to TV shows that elevate professional stagers to the level of rock stars; however, you don't need a degree in interior design in order to make your home more marketable. Although staging is popular with sellers, landlords often overlook its importance in the rental market. By following a few simple rules, you may be able to substantially reduce the amount of time it takes to get prospective tenants to sign on the dotted line. 


1. Clear the clutter. Any home stager will tell you that the most important thing you can do to move a property quickly is to clear the clutter. If you don't have time to properly weed through a mess of items, at least box them up and relocate them. Get a storage unit or make use of extra basement space. Your unit will seem more spacious and welcoming, and there is also an additional hidden benefit in store for you: part of the moving process will already be behind you.


2. Keep it simple. It is important to de-personalize and simplify your space. The environment you create should subconsciously encourage prospective tenants to visualize their own furniture and possessions within it. Take down pictures of friends and family and remove childrens' art collections from the fridge.


3. Keep it clean. Nothing turns future tenants off more than dirt, grime, and dust bunnies. Even if they can see past a mess, they may not be able to see past filth. Make sure the bathroom and kitchen are well-scrubbed and the floors are vacuumed and/or mopped. 

4. Don't put off repairs - fix it now. Many owners put off repairs until they have checks in hand from their future tenants, but it is best to go ahead and make certain repairs before you start showing the place so that it looks more presentable to future renters. Things like broken blinds, mildew-ridden grout, and dust-caked ceiling fans are quick and easy fixes that can be done before showings commence.

5. Make a deal with the occupants. If you are not currently living in the unit and it is occupied by someone else, you may wonder how you can pull these things off without their cooperation. The answer? Make a deal with them. Offer them a generous gift card to their favorite restaurant if they are able to keep the place looking presentable while it is being shown. It may sound crazy, but it actually works. As you can see, with a small amount of time and effort, you can quickly transform your rental property into a hot listing. A space that shows well will fly off the market much faster than a dirty, cluttered space in ill repair. Stage your space for maximum impact and prepare to reap the rewards of a quick and easy rental!

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Loft Living, Is It Right For You?

Lofts are often described as cool, hip, urban and a number of other Bohemian phrases that connote a certain idealized lifestyle. Lofts often have many appealing elements, to be sure. Many people looking to break out of the dull, drab four walls often are attracted to the allure of a loft home. They often offer exposed brick walls, expansive open spaces, unique floor plans, timber beam ceilings, hardwood floors, fireplaces, and the list goes on. Lofts offer great flexibility in terms of the home layout and many are one of a kind homes.

Before jumping on the loft bandwagon, carefully consider all aspects of your choice. Is loft living right for you?

Exposed Brick. Looks good, but here's the downside. Lofts are often constructed from old factory or industrial buildings. The brick is typically very old and has begun to deteriorate. This mean dust and lime scaling. It is difficult to maintain a clean home when your walls are constantly throwing off dust. Sealing the brick in many cases is not a viable option. Insulation. That same brick may not offer you the same comfort as a modern insulated home. An exterior exposed brick wall means exactly that. You are exposed to the outside elements. The only thing between you and the outside is a layer of potentially decaying brick with no real insulation. Always consider the heating cost when considering a loft with exposed brick.

Also, take a careful look at the floor and ceiling partition. Is there an adequate sound barrier? Many lofts have flooring that was original and may not be insulated between you and your neighbors. Make sure you visit the home when neighbors are present so that you can personally judge sound insulation. 

All that space. That open floor plan looks appealing at first, but does it suit your lifestyle. Many people find comfort in defined rooms which a loft may or may not offer. Do your furnishings comport with the space? Are living areas distinct from sleeping areas? Consider what happens when a spouse, partner, guest want to watch tv when you want to sleep. A lack of doors may be sorely missed on those occasions. 

Creature comforts. Many loft building lack some of the most appealing creature comfort. Modern building, as opposed to those constructed as factories at the turn of the century, offer many amenities. Pools, gyms, common area decks, gardens, etc. may be missing. In sum, lofts are a great hip urban adventure for many. For others, they are an image that may have little practical appeal after careful consideration.

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West Town Office Now Open

As of June 1, 2009, Rent Smart's West Town office is now open.  We are very excited by the opportunity to have a presence in West Town as our client base in that area has grown incredibly over the past year.  The office is a state of the art facility that will allow Rent Smart to host 50+ agents to serve our clients in the West Town, Ukrainian Village, Bucktown, Humboldt Park and Logan Square communities.  Our manager for this location will be Annette Ivory.  Annette is a licensed real estate broker who brings a wealth of experience and enthusiasm to the position.  Annette is looking forward to the challenge of launching Rent Smart's new office in West Town.  Stop by and say hello.

To contact Annette or the West Town office, call 773-645-4130. Or, email Annette at ivory@rentsmarthicago.com.  View all of our office listings at www.RentSmartChicago.com 

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The Perils of Moving In A Big City Like Chicago

Moving into your new place in a big city may not be quite as simple as you think. Here are a few things to consider as you plan your move: 
1. If hiring movers (laborers), make sure you know up front whether or not they are licensed, insured, etc., so you know what kind of liability will fall on your shoulders. There are plenty of laborers in big cities who may do a great job, as long as you understand you could be on the hook for damage they may cause. 
2. If you are moving into a large building with loading docks and freight elevators, make sure you schedule times to reserve their use. Also make sure you have filled out the appropriate paperwork and paid fees or deposits that may be required of you. Taking care of these details in advance can save you some major headaches later on. 
3. Make sure you rent a truck that will fit at its final destination. Big cities are cramped. Make sure you will actually be able to find a place to park and unload all that stuff you so carefully packed.
4. Speaking of parking: turn your flashers on and set out safety reflectors, cones, etc., so that you don't get bulldozed on your way in or out of your new place. Make sure you have adequate help so that you don't block traffic for too long. Driveways don't exist in many urban areas. You will most likely be unloading your belongings in the middle of the street. Prepare for the inevitable.
5. Know where to return your truck and the hours they are open. Since there may be nowhere to park your empty, over sized vehicle overnight, make sure you get that truck back in time or you may be stuck with a ticket, a tow, or a night of driving around aimlessly.

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Top 10 Considerations When Deciding to Work With An Apartment Search Firm

If you are like many people who are relocating to a new city, you know by now how frustrating it can be to find an apartment that is right for you. It is difficult to make appointments to see apartments when you are available, the landlord is not available or the apartment is just not as advertised. The solution is to work with a professional apartment location firm for your next apartment. In selecting a firm, here is what you should look for:  
1. Is the firm comprised of professional Realtors and licensed rental agents? Many firms employ inexperienced people just out of school or just out of work who are looking for a temporary gig until they can find a real job. Avoid those companies. A good apartment search firm will employ only licensed real estate salespersons or leasing agents. These people see their job as a career and not just a temporary paycheck. The results you will get are similarly professional.
2. How does the firm get its listings? Apartment location firms employ various means for obtaining the listing for the apartments that they list. Some employ call centers where employees sit at banks of phones calling potential landlords that they have located through scanning classified advertisements. The quality of these listings can vary greatly. Often, the apartments have not even been viewed by the agency prior to listing and the people who are asking you to rent it are not even familiar with its amenities. Go with an office that finds quality apartments through hard work and referrals. Ask how the firm gets its listing. Do landlords come to them or do they employ cold calling tactics? Only firms that put the best effort forward in obtaining the listing will have the best apartments to show.  
3. How does the firm market its listings? Take a careful look at how each firm handles it marketing. Does the firm have just a bare bones description of the property? Are there detailed photographs of the inside and outside of the properties? Are its amenities fully described? Work only with firms that have detailed descriptions of the properties that they renting. If the firm did not take the time to get the details, how can you trust that they will show you the properties that you want to see.  
4. Does the firm have a web site? Many real estate firms offer properties for rent from time to time but few are dedicated full-time to the rentals. Take a good look at the firm's web site. Is it dedicated to finding apartments for people? Or, as is common, is the firm's true business the sale of properties. Does the firm have detailed descriptions of the properties it rents on it web site with photographs?  
5. Where is the firm located? Is the apartment finding service in the city itself? If so, what neighborhoods does it have offices? There are many "national" firms that seek to rent apartments but hey often have no physical presence in your area. Avoid them. Can you really expect that such firms will know anything about the neighborhoods that you want to live in? Look at where the firm has offices. Firms are most familiar with the areas where they have offices.  
6. Are the agents knowledgeable? When you call a firm and speak with the firm's agents are they knowledgeable? Can they answer specific questions about the apartments for rent? If not, do not use that firm. Work with a firm that has only knowledgeable agents that know the properties for rent and the neighborhoods where those properties are located. If an agent cannot answer specific questions, look elsewhere.  
7. Does the firm charge a fee? Ask the firm what fees there are for their services. Most firms that rent apartments are paid by the landlord and not the tenant. However, some forms also charge application and credit report fees. Before you start working with a firm, ask what these fees are and get it in writing. Expect to pay a reasonable fee of $50-75 including your credit check.  
8. How are showings handled? It is also important to consider how each firm handles the actual showings for its apartments. Are you meeting the agent at the properties? Do you know the city well enough to find your way around to the different properties? A good firm will meet you at their offices and then drive you to each appointment. You can relax while the agent locates each property and while the agent drives take in the areas amenities.  
9. Does your agent listen? The number one frustration expressed by tenants is that the agent did not listen to their particular preferences and instead showed them properties that were not in the areas they desired or simply did not meet their needs. Many felt that they had wasted their time. If you notice that your agent is showing you properties that are out of your price range, not in the neighborhood that you want or are simply not as described to you, then stop working with that firm. A good apartment service listens to you.  
10. Do you feel comfortable with your agent? As the client, you have the right to demand good service from courteous, knowledgeable and professional agents. If ever you are uncomfortable with the service that you are receiving, simply stop working with that form and contact one that is lives up to your standards. Never feel pressured into making a decision that you will regret. A good firm will never employ pressure tactics but will invest the time with you in making a good decision.
Finding an apartment can be a good experience if you choose the right firm to assist you. Selecting that firm should be undertaken with serious consideration because the choice you make will impact you significantly. It is after all your home that is at issue. Select a firm based upon these considerations and you will no doubt succeed.

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The Sky is Falling - Or at Least Your Rent Is

Chicago Crain's Reports:

Downtown apartment rent falls by most in 7 years

By: Alby Gallun Feb. 23, 2009

(Crain) — Rents at top-tier downtown apartment buildings last year fell the most since 2001 as a development boom and deepening recession gave tenants the upper hand over landlords.

Effective rents at Class A downtown buildings fell to $2.11 a square foot in the fourth quarter, down 6.2% from $2.25 in the year-earlier period, according to Appraisal Research Counselors, a Chicago-based real estate consulting firm. It was the first annual drop since 2003 and the biggest decline since 2001, when effective rents slid 7.7%.

In a case of bad timing, rising unemployment is depressing demand for apartments amid a surge in supply of both apartments and unsold condominiums that are being rented out. Many landlords are still holding the line on face rental rates, but a growing number are offering one or two months free, driving down so-called effective rents.

“I think this next year is going to be really tough,” says Appraisal Research Vice-president Ron DeVries. “We’ve just been having lots of ugly conversations lately.”

Effective rents fell 6.6% between the third and fourth quarters, the biggest quarterly drop since Appraisal Research began surveying the downtown market in 1997. The fourth quarter is typically slow for most landlords, with rent declines even in strong markets.

The downtown Class A occupancy rate, meanwhile, fell to 90.6%, from 92.8% in the third quarter and its lowest level in six years, according to Appraisal Research. While Mr. DeVries expects the occupancy rate to slip further, he doesn’t see effective rents dropping as low as they did in the last downturn, when they bottomed out at $1.83 in 2003.

The depressed for-sale residential market initially benefited apartment landlords, as many would-be buyers rented instead, either because they couldn’t qualify for a mortgage or didn’t want to buy a house or condo that could fall in value.

But the worsening economy now is depressing demand, forcing some renters to save money by doubling up or moving back home with their parents. The job market, which drives demand for apartments, continues to shrink: Moody’s Economy.com forecasts that the Chicago area will lose 133,000 jobs in 2009 — about the same number lost during the last recession — and won’t start adding them until after 2010.

Still, an oversupply of apartments is the larger problem for landlords right now, especially in the South Loop. Developers completed three buildings comprising 1,016 apartments in the South Loop last year, according to Appraisal Research.

And condo rentals are becoming a bigger competitive threat, with developers adding nearly 3,200 condos to the South Loop in 2008 and 2009. Unwilling or unable to sell their units in a lousy market, many condo owners are renting them out for the time being.

Some are offering good deals on rent, one reason new apartment high-rises in the South Loop have been slow to fill up. A 278-unit building at 1401 S. State St. developed by Chicago-based Equity Residential and Dallas-based Lincoln Property Co. is only 60% leased 10 months after opening, according to Appraisal Research. Under normal market conditions, a similar building would be at least 90% full at this point.

The new South Loop projects “have hit the market at the worst time,” Mr. DeVries says. “If you want to live in the South Loop, you have lots of options. That has really slowed down the leasing.”

Lincoln and Equity Residential representatives did not return calls for comment.

Some landlords are trying to address the competitive threat posed by condo rentals by playing up the advantages of living in an apartment building, which usually have on-site customer service staff.

“We talk about the benefits of being in a professionally managed building,” says Mark Segal, president and CEO of Chicago-based Habitat Co., whose downtown properties include Kingsbury Plaza, a 420-unit apartment tower at 520 N. Kingsbury St. When tenants have a problem, they “can go directly to our management staff as opposed to going to a unit owner.”

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