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uburban Chicago's apartment market is experiencing a surge in demand, driven by the nation-leading rent growth and limited new supply. This has attracted several major investors who are likely to raise rents in the short term due to the lack of new development pipeline.

    In recent deals, Miami-based Pensam Capital paid $40 million for the 216-unit Covey at Fox Valley apartment complex in Aurora, while New York-based Avery Capital acquired an 80-unit townhome community in Hampshire for nearly $24 million. An affiliate of Oak Brook-based Inland Real Estate Group also purchased the 306-unit Wheaton 121 apartment complex for $101 million.

    The deals demonstrate the momentum gained by suburban Chicago multifamily values, with rent growth ranking tied for the most in the U.S. alongside Miami over the past year. The surge is attributed to a lack of new supply due to developers pulling back since interest rates jumped in 2022 and rising construction costs making building less feasible.

    "We have investments throughout the U.S., and the Midwest is outperforming any region by far," said Pensam Capital's Hen Shoval, citing a lack of new supply as the main reason. Only 2,500 Class A apartments are projected to be completed this year, down from 3,500 units last year.

    The Wheaton deal was sold for about $330,000 per unit and ended a drawn-out sale process that began in 2022. The buyer, Inland Real Estate Group, cited the property's high traffic location and stable rent growth as key factors in its decision to invest.

    Soaring property taxes have suppressed property values in the Chicago area, but investors are seeking refuge in suburban markets outside Cook County. However, even these areas face substantial financial impacts, leading some investors to avoid Cook County altogether.