Uptown is one of the city's popular destinations for music lovers. For rock and hip hop shows, there's the famous Aragon Ballroom and Riviera Theatre. For jazz, it's the legendary Green Mill. The neighborhood also has a seen a growth in the number of restaurants and bars over the past few years; the some notable establishments include 42 Grams, a critically acclaimed restaurant which received 2 Michelin Stars in 2014,the Reservoir, and the craft brew favorite, Hop Leaf.
Uptown saw a dramatic downturn during the financial crisis; many condo buildings were rented. Additionally, when some of the condo owners tried to sell their units, banks wouldn't lend as a majority of units in the same building were not owner occupant thus pushing values even lower. Eventually, the owners went underwater and were forced into foreclosure. However, 2012 marked the bottom for the area, and investors began to buy multiple units to gobble up the high inventory at depressed prices. This investment was primarily based on geographical location.
- Proximity to Lake Shore Drive & Montrose Beach
- Access to the CTA Red Line
Cedar Street has made large acquisitions over the past three years and provided the Uptown neighborhood with amenity-filled rentals which are affordable and close to public transport. The most prominent property is No. 1325 Wilson Flats; Jay Michaels and company were one of the first developers to introduce micro units to combat the surging rents in the city of Chicago. They provide affordable units, albeit in smaller spaces. However, as the millennial generation fixates more on access to transport, nightlife, and amenities, the FLATS product fills a much needed niche in the market. On the flip side, FLATS has achieved the highest price/sq.ft across the neighborhood at almost $3/sq.ft.
Lakefront Tower-One of the largest new construction projects in Uptown is moving forward as JDL Development struck a deal to build a $200M luxury high-rise on the former site of Cueno Hospital. This will mark the largest new developments the neighborhood has seen in years,and further supports the neighborhood revitalization efforts as the project will provide eye-catching design, additional retail space, and a trophy worthy product on Montrose Avenue near the lake.
Based on the new retail and residential projects which have come & are coming to market, Uptown has seen a 9% of increase in rents as millennials and families look to live in Uptown. This increase in rent has been the result of extremely low vacancy rates (sub 3% in 2015). With low vacancy rates and new developments, Uptown provides attractive returns in two ways:
- The average cap rate stands at 7.2% in early 2015
- Investors will enjoy greater appreciation than other parts of the city as foreclosure inventory continues to dwindle down
As interest rates begin to tick up, investors seeking greater return on their cash should consider the relatively low risk neighborhood of Uptown as the payoff on a 3-5 year hold will prove to be much more valuable than the prime neighborhood of West Town, Bucktown, Wicker Park, and Lakeview counterparts.