In researching the investment case for our latest US project, Flexhouse in Chicago, we identified some key residential demographic trends that support our confidence in the high potential of the Logan Square neighbourhood.
Chicago has a number of key residential neighbourhoods located to the north of the city centre. Positioned on the eastern side of the Chicago River are the Near North, Lincoln Park and Lakeview. These areas represent some of the city’s most sought-after residential locations, and real estate rents and sale prices in these areas reflect that, as you can see in the infographic above.
Each of these areas has a very particular character that has typically attracted a specific demographic of buyers and renters.
The Near North is Downtown Chicago’s prime residential and commercial area. This is where Chicago shoppers come for the Magnificent Mile, as well as the city’s most famous bars and restaurants and the lakeshore beaches of Lake Michigan. The area is home to many mansions and listed buildings, having traditionally been the place to be for the city’s most affluent families.
Further north is Lincoln Park, which is very much Chicago’s aspirational family neighbourhood. A wealthy and primarily residential enclave that’s away from the hustle and bustle of Downtown, Lincoln Park is defined by its landscape of classic low-rise brownstones and townhouses. The area boasts many of the city’s best schools as well as the Lincoln Park Zoo and the Diversey Marina on the lakeshore.
Another step to the north takes us to Lake View. This is a much younger, more vibrant area that has held great appeal for the city’s single young professionals, who initially moved there when prices in the Near North became too high for them to bear. Lake View is known for its dining and nightlife, as well as Wrigley Field, home of the Chicago Cubs.
Housing in each of these areas has become significantly more expensive in recent years, with prices in Lake View in particular having significantly outpaced the citywide average. This has left many young professionals and families looking for alternatives residential possibilities that offer a similar lifestyle without being quite so hard on their bank balances.
On the western side of the Chicago River are two neighbourhoods that have recently come to be recognised as fitting this bill.
Wicker Park is very much a Lincoln Park-lite area. A very family-friendly neighbourhood, it offers good schools and a quick commute into the Loop, the city’s primary business district. While still rather highly priced, it remains a step down from the prices asked in Lincoln Park, and so is seen as strong option for families looking to save money while still enjoying the lifestyle of a similarly family-oriented area.
To the north of Wicker Park is Chicago’s real up-and-coming neighbourhood. While not significantly further from the centre of the city, Logan Square offers a huge step down in terms of residential pricing that is attracting a host of Chicagoans to make the move across the river.
The area has very much taken over Lake View’s mantle as the city’s hipster paradise, and many of the city’s young professional crowd are increasingly drawn to this vibrant neighbourhood’s trendy bars, gastro pubs, street cafes and farmers’ markets.
All this interest is driving rapid gentrification, and as the uplifting of the area continues, the demographics it appeals to a clearly widening. With Wicker Park still significantly more expensive, the young families of Chicago, many of whom are making that initial jump to family living by buying their first home, are also looking to Logan Square as a residential destination.
This high level of incoming demand played a key role in our identification of Logan Square as one of Chicago’s best looking property investment locations for the next few years, and we’re very confident that investors entering this market now will see some impressive returns.
You can see these migratory trends summarised in our latest infographic, and if you’d like to read some more about what we think about Logan Square take a look at the recent blog post from our US Investment Manager, Scott Hagerman.