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The Neighborhood of Baseball (and Apartments)

Rent Growth Up When Cubs Make Playoffs

By | Wednesday, October 26, 2016

The poet/essayist Barry Gifford once wrote a memoir of this Chicago Cubs fandom and titled it “The Neighborhood of Baseball.” And why not? Wrigley Field is one of the few Major League ballparks to actually lie within a neighborhood.

Apartment buildings line Waveland and Sheffield avenues, just across the street from the outfield walls. Many enterprising building owners, knowing that their rooftops offer an unobstructed, if far-away, view of the game sell rooftop seats for exorbitant sums of money.

That wasn’t happening in 1945, the last time a World Series game was played at Wrigley Field. The last time, that is, before Game 3 of the 2016 Series is played on Friday, Oct. 28, after the first two games are played in Cleveland.

Rooftop owners are charging a minimum of $1,235 per ticket for Games 3 and 5, and a whopping $1,549 for Game 4 on Saturday, Oct. 29. That’s still less expensive that the $2,700 being requested on the secondary market for a standing room only spot inside the ballpark.

But those buildings tell only a part of the story of Wrigley Field and the surrounding neighborhood of apartments. The venerable stadium with the ivy-covered walls and the hand-operated scoreboard lies within the Belmont to Montrose submarket in the Chicago metro – which just happened to have the highest effective rent growth in the market during the Cubs’ 103-57 season in 2016.

The submarket is a lot more than Wrigleyville. Located about 4-5½ miles north of downtown and extending from the lakefront west for about 2 miles, the area includes some top-notch apartment properties on Lake Shore Drive, as well as a host of smaller properties such as those near the ballpark.

 Rents in the submarket are more than $300 more expensive than the market average -- $1,951 to $1,613 as of September 2016 – making Belmont to Montrose the sixth most expensive submarket in the Chicago area and the fourth highest in the city itself. Much of that is a result of the lakeshore apartments; some of it could be because of the proximity to Wrigley Field (and two “L” rail lines).

 But is there a correlation between annual effective rent growth in the Belmont to Montrose submarket and Cubs performance? In other words, when the Cubs thrive, does the neighborhood apartment market thrive, as well?

The Cubs have made the playoffs five times since Axiometrics started tracking the submarket in 2001. We tracked rent growth in the third quarter of each of those years – during the height of the baseball pennant races. Belmont to Montrose rent growth increased from the previous year in four of those five playoff years – the lone exception coming in 2008, the second of two straight playoff berths.

(In the chart below, the red dot indicates the Cubs’ 2016 World Series berth, the blue dots note the Cubs’ 2003 and 2015 League Championship Series appearances, and the gold dots show the Cubs’ 2007 and 2008 Division Series losses.)

The first of those playoff berths was in 2003, when third-quarter rent growth in the submarket was positive for the only time in the nine quarters from the third quarter of 2002 to the third quarter of 2004. Cubs fever? Possibly. But it probably be going too far to say that Steve Bartman interfering with that infamous fly ball, opening the floodgates for the Florida Marlins to snatch a World Series berth from the Cubs, was the reason rent growth went back to negative in the fourth quarter.

Rent growth doubled from 2006 to 2007, when the Cubs won the National League Central title, but fizzled out in the NL Division Series. The pace at which rents increased was down very slightly in the third quarter of 2008 – another division championship and NLDS flop – but the rate was much higher than the city’s as a whole.

It took seven more years for the Cubs to earn another playoff berth. Belmont to Montrose rent growth was negative in the third quarter of 2014, when the Cubs finished below .500. It increased more than 5 percentage points in 2015, when the Cubs won a wild-card berth, beat arch-rival St. Louis in the NLDS but were swept by the New York Mets in the League Championship Series.

Then came 2016. Rent growth increased once again, gaining the top spot among Chicago submarkets. And the Cubs are in the World Series for the first time since 1945.

Though rent growth tends to increase during the years the Cubs make a playoff run, the opposite isn’t necessarily true. The highest third-quarter rent growth since 2001 came in 2010, at 11.0%, when the lovable losers were 75-87 and brought up the rear in the NL Central. The 6.3% rent growth in the third quarter of 2012 was little solace for the Cubs’ 61-101 season.

During those years, the Belmont to Montrose submarket reflected the overall apartment market. So there’s little to suggest that the submarket always moves in the direction of the Cubs’ performance. It’s just a strange coincidence that apartment rent growth in “The Neighborhood of Baseball” appears to strengthen whenever the Cubs are strong.

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