Leasing Agents On Rise

Written by Antonia S. Perdomo    Tuesday, 20 December 2011

With sales down, firms add rental specialists Until the housing market crash, Prospect Equities Inc. had never completed a residential leasing transaction. The Oak Brook-based real estate firm’s focus had been home sales, but the downturn left CEO Richard Killian looking for other ways to boost revenue. In a bet that the rental market was on the upswing, Mr. Killian started hiring leasing agents in 2008 to work with landlords and renters. Now, Prospect Equities employs about 70 agents, in addition to a residential sales staff of 580, in six offices across Lincoln Park and the west and southwest suburbs. Mr. Killian, who founded Prospect in 2000, predicts his firm will complete 430 leasing transactions this year, up 14% from 370 in 2010. He acknowledges that maintaining that growth will be a challenge. “It’s getting harder because there’s more competition,” he says. Industry observers say numerous leasing agencies, also known as apartment locators, have popped up in recent years. “There’s been a tremendous increase in the number of agencies, and we’re all fighting for the same client,” says David Kelley, broker-owner of Apartment Guys LLC, a Chicago-based apartment rental agency. The exact number of Chicago-area agencies couldn’t be determined, but data from the Illinois Department of Financial and Professional Regulation show that the state’s leasing-agent ranks jumped 29% to 1,460 in 2010 from 1,042 in 2008. But with the number expected to increase again this year, some worry the market is becoming saturated. “I think we’re getting to a tipping point,” says Justin Elliott, founder and CEO of Chicago Apartment Finders Inc. “You can only have so many agents. I think at some point the growth will come to a halt.” Apparently that time hasn’t come yet. Mr. Elliott predicts his firm will complete 7,000 rentals this year, a 9% increase from 6,400 in 2010. He plans to add up to 25 agents in coming months. Chicago Apartment Finders, founded in 2002, has 100 agents in four city offices, up from 80 three years ago. Luxury Living Chicago’s owner, Aaron Galvin, notes that a lot of firms and agents got into the business in the past two years, as demand climbed and several high-profile apartment buildings, like River North’s 198-unit Flair Tower and Alta at K Station, an 848-unit apartment project in the West Loop, came online. Even though strong interest in rentals continues, some of the newer marquee towers are filling up, leading developers to raise rents and offer fewer incentives. Chicago-based Luxury Living sealed about 300 deals last year, a 25% increase from 2009. But this year, Mr. Galvin expects his firm’s volume to dip slightly. “You’re going to see a lot of attrition in the industry in the next 18 months because the easy money isn’t there anymore.”

Last Updated ( Tuesday, 20 December 2011 )