Northwestern University and Evanston's Only Daily News Source Since 1881

The Daily Northwestern

Northwestern University and Evanston's Only Daily News Source Since 1881

The Daily Northwestern

Northwestern University and Evanston's Only Daily News Source Since 1881

The Daily Northwestern

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Landlords say market for rentals recovering

By Elizabeth Gibson

The Daily Northwestern

Despite a high vacancy rate in 2004, Evanston’s apartment rental market is slowly improving — causing some property companies to cut down on special deals for prospective tenants, local property managers said this week.

“What we’re finding (for 2005) is vacancies are down a little … (and the lease) renewal rate is up a little,” said Andy Scott, managing broker at North Shore Apartments and Condos, 828 Davis St., which helps people find apartments in about 50 buildings on the North Shore. “The market is firm, but not necessarily strong.”

Apartment vacancy rates in Evanston were about 8 percent in 2004 — the second-highest vacancy rate in the last 20 years — according to a recent study by Tom Murray, a commercial broker at Century 21 Universal.

The 2003 vacancy rate was about 10.3 percent, but in previous years the survey reported vacancy rates consistently below 5 percent.

Vacancy rates rose partially because people increasingly are buying condos instead of renting apartments. Low mortgage rates make condos a more profitable investment, property managers said.

But Scott said the market is making a turn for the better.

“Condo sales have started to slow down significantly,” Scott said. “There’s sort of a parity being reached between sales and renting.”

Scott estimated that last year more than half of Evanston apartments offered incentives to draw residents, such as offering lower rent or a month of free rent. Less than 50 percent are offering incentives this year, he said.

But at least one apartment manager near campus is offering lower rent to try to fill his building’s vacancies.

Dennis Pelson, who still has two vacancies at his six-unit property at 817 Hamlin St., said new condos and apartment complexes are putting stress on his older building.

“The (newer buildings) are higher priced, but students seem to be willing to pay more for more amenities,” said Pelson, a property manager for the J&J Management Company. “Most people want central air and dishwashers, things like that. In our buildings, which are vintage buildings, we just don’t have that.”

Pelson said he lowered the rent $70 on his two remaining vacancies. Two years ago, apartments were filled by this time, he said.

In Murray’s study, the area around Northwestern showed lower vacancy rates than south Evanston.

“We’re concerned that we have two vacancies,” Pelson said. “But I understand there are people in a bigger hole than we are.”

Despite the optimism of other local landlords, Pelson said he expects the market to remain slow for a while.

If vacancies persist for too long, he said, landlords may need to look into options more dramatic than incentives, such as selling and moving to a better market.

Closing apartment complexes would result in a higher profit for those who remain in the market, but off-campus housing options would decrease.

But Dean Tsitsis, property manager of Quick Rental Real Estate, said he thinks the market is “extremely strong.”�

“We’re doing the same advertising we’ve done in the past and we’re getting the same response,” said Tsitsis, who currently has no vacancies in his six Evanston buildings.

The root of his success?

“We’re darn good landlords,” Tsitsis said. “A lot of our customers recommend us to people for next year.”

Though residents should not expect their rent to increase this year, Tsitsis said he thinks rent will go up next year because of higher taxes and utilities costs.

“Next year look for a 20 percent (rent) increase,” he said.

Reach Elizabeth Gibson at [email protected].

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Landlords say market for rentals recovering