Trends in Midwest Multi-Family Construction

Written by: David J. Rintz, Regional Vice President – Multi-Family

Trends in Midwest Multi-Family Construction

The start of the pandemic brought concern that multi-family demand would decline as people fled apartments in search of more space. While luxury and market-rate developments saw higher vacancies in 2020, the market quickly rebounded. By mid-2021 demand for multi-family was at the highest levels recorded and it has remained strong since. Young adults who moved home during the pandemic moved back on their own and recent graduates hit the housing market for the first time.

Affordable housing saw increased demand throughout 2020 and 2021. McShane completed Fifth Avenue Apartments in Maywood, Illinois, in early 2021 and the affordable housing residence received an astonishing amount of interest with more than 3,000 letters of interest and 1,700 applications for just 72 units.

The pandemic also accelerated migration to smaller cities and suburbs. While some are opting to live in single-family homes, others are choosing apartments in secondary and tertiary markets because they offer more space, a lower cost of living and good public schools. This trend is especially conducive to our business as we have a strong presence in suburban Chicago, as well as a growing presence in the smaller Midwestern cities of Madison and Milwaukee, Wisconsin.

Another trend we are seeing is increased popularity in suburban mixed-use communities that offer housing, employment and entertainment within a single development. These developments provide many benefits of a city, but with other advantages of the suburbs. One such example is CityGate Centre in Naperville, Illinois. CityGate Centre integrates restaurants, retail, a hotel, wellness services, offices, and will soon offer housing. Our team is underway with Lincoln at CityGate, which will incorporate 285 luxury apartment units.

While developers will continue to face material production bottlenecks, cost escalation and labor shortages in 2022, we remain optimistic about the year to come. Demand for multi-family doesn’t appear to be diminishing anytime soon, and low vacancy rates combined with rising rents will lead to an increase in project starts. As one of the country’s top multi-family contractors, we look forward to the opportunity to meet this demand as we grow our presence nationwide.