Top 5 South Side Neighborhoods to Watch for Multifamily Growth in 2025

With Joe Kahlhammer | South Side Chicago Broker, Director Essex Realty Group, LLC

Investor interest in Chicago’s South Side has notably increased over the past year—and there’s plenty of reason why. With strong rent fundamentals, compelling cap rates, and major redevelopment activity, several neighborhoods are seeing renewed interest from both local and out-of-state buyers.

To help break it down, I put together a comparison of average rents and cap rates across five South Side neighborhoods we’re actively working in:

South Side Multifamily Snapshot (2025)

Data sources: RentCafe, Essex Realty comps, ConnectCRE, CREConsult, and internal deal tracking.

Bronzeville
Average rent sits around $1,489/month, nearly $1,000 below the citywide average, making it attractive for value-add plays. We’re seeing a mix of historic renovations and infill development, and tenant demand continues to rise thanks to improved amenities and public transit access.

Woodlawn
With the Obama Presidential Center underway, Woodlawn is one of the most promising long-term bets. Average rents are still below $1,500/month, but trending upward. New product like the Grant at Woodlawn is bringing energy to the market, and we expect additional appreciation as more infrastructure is built out.

South Shore
If you’re looking for affordability and scale, South Shore delivers. Average rents hover around $1,242, and we’re seeing cap rates up to 8%. Investors here are finding well-located brick walk-ups near the lakefront that offer strong day-one cash flow with upside through renovations.

Hyde Park
This is one of the most stable rental submarkets on the South Side, supported by the University of Chicago and cultural institutions. Rents are higher—around $1,725/month—but vacancy is consistently low. It’s ideal for buyers seeking long-term stability over heavy value-add repositioning.

Kenwood
Tucked between Bronzeville and Hyde Park, Kenwood often flies under the radar. But we’re seeing more mid-sized multifamily transactions in the area, and cap rates remain attractive—around 8.3% based on recent deals. It’s a strong pick for investors seeking solid cash flow with proximity to higher-priced areas.

Final Thoughts
These neighborhoods represent some of the best multifamily value in the city right now. Rent growth across the South Side is tracking with the broader metro average (~3.3–3.8% annually), but with better pricing, higher yields, and strong tenant demand. Whether you’re looking to add to your portfolio or make your first South Side acquisition, now’s a great time to dig in.

Connect with Joe Kahlhammer to learn more about the Chicago South Side market and explore active opportunities.

Since 1990, Essex Realty Group, LLC has served Chicago’s investment real estate market as a top multifamily brokerage firm, specializing in Chicago multifamily for sale properties. Contact us today to learn more about our recent multifamily and mixed-use property sales or click HERE.

If you enjoyed this content and would like to stay in the loop, please consider following us on LinkedIn and Instagram!