Q1 2025 Champaign-Urbana Multifamily Market Report

Key Findings

Average rents are $1,115/month, compared to the national average of $1,760/month.
Move-in rates are expected to increase through 2025, as the vacancy rate remains at 6.4%.
Approximately 207 multifamily units are under construction.

By the Numbers

Units Under Construction: 207
Units Delivered: 8
Units Absorbed: 32
Vacancy Rate: 6.4%
Annual Rent Growth: 3.7%
Average Market Asking Rent Per Unit: $1,115 | Q1 2025 | Source: CoStar Group

Market Overview

Champaign-Urbana is the home of Illinois’ flagship University of Illinois system. The market houses around 40,000 undergraduate and 20,000 graduate students, as well as the university’s 12,000 academics and administrators. In addition, community colleges Parkland in Champaign and Tricoci University of Beauty Culture in Urbana offer approximately 16,000 students and 100 degrees each year.

Since 2016, the market has maintained vacancy rates well below its historical 8.5% average, fueled by strong institutional anchors. As of Q1 2025, the market is experiencing a -0.2% year-over-year change rate due to the recent completion of 127 units over the past year. The mid-tier accounts for the majority of the area’s inventory expansion, with 94 units completed and 207 units underway.

Sales

Multifamily investment activity remained extremely limited, continuing a year-long slowdown in transactional volume. Over the past 12 months, sales of existing assets have been nearly nonexistent, a stark contrast to the peak years of 2022 and 2023 when annual deal volume hovered around $92 million and peaked at $123 million over the past five years. Market pricing is estimated at $120,000 per unit, well below the $230,000 national average, while cap rates currently range between 6.1% and 7.1%, albeit with limited sales data to benchmark. Despite sluggish activity, the market did see its first significant institutional purchase in years when MF Capital Partners acquired the 662-unit Town and Country community for $38 million at a 6.75% cap rate in early 2024. The property’s assessed improvements have grown modestly since Monarch Investment’s earlier purchase in 2013, reflecting the area’s steady, if unspectacular, appreciation trends.

Sales Statistics

Sales Volume: $7M
Average Sales Price Per Unit: $117K
Cap Rate: 7.7%

Student Housing

Champaign-Urbana, home to the University of Illinois Urbana-Champaign (UIUC), anchors one of the Midwest’s strongest student housing markets. With 47,188 full-time students and a broader campus population of 56,563 across all levels, demand remains deeply entrenched. The presence of ~12,000 faculty and stuff, along with Parkland College’s and Tricoci University of Beauty Culture’s additional 16,000 students, further strengthens the stability of the local housing ecosystem.

Currently, student housing in Champaign-Urbana boasts an occupancy rate of 94.3%, supported by a steady rent growth of 2.0% across all properties within a 10-minute commute of campus. Average asking rents per bed sit at $777, offering an affordable value compared to national peer universities. Notably, properties 10 to 20 minutes from campus have demonstrated even stronger rent growth (8.7%), with average asking rents o $616 per bed, suggesting a widening affordability gap close to campus and more rent appreciation opportunities further out.

New supply remains modest. No new beds were delivered over the past year, and only 199 beds are currently under construction, limiting future oversupply risks. Recent deliveries, including 405 E Stoughton Street (216 beds) and 214 E Clark Street (29 beds), have achieved high occupancy rates, illustrating strong leasing absorption for modern product.

The sales market is also active. High-profile transactions like 210 S Fourth Street (Octave), which sold for $57.5 million, showcase investor confidence in the market, with price-per-unit metrics reaching $344k+ at top-end sales. Cap rates are compressing in the best-located assets, ranging between 5.4% and 6.5%, consistent with healthy midwestern student housing fundamentals.

Highlights

A top 10 enrollment rate with 47,118 fulltime students and 56,563 total enrollment, underpinning stable demand.
$777 average rent/bed, growing at 2.0% year-over-year.
Rent growth is strongest in 10-20 minute commute range at 8.7% annually.
The retention rate at UIUC is an impressive 94.0%, one of the highest nationally.
Sales comps show cap rates averaging ~6.0% and price/unit ranging $94K-$337K.
0 new beds delivered in past 12 months, 199 beds under construction.