The pandemic is the definition of a disruptor. For apartment developers, however, the pandemic's impact was often varied between project and submarket, according to Laurie Lustig-Bower, an EVP at CBRE and an expert in apartment development. Lustig-Bower is discussing the challenges multifamily developers have faced over the last year at GlobeSt.com's annual Apartments conference in Los Angeles, October 26-27.

Over the last year, Lustig-Bower's business activity was stable, but she did she changes trends in some submarkets, particularly those that were nearing overdevelopment before the pandemic. "There was a decrease [in activity] in some submarkets that were hit the hardest by COVID," she tells GlobeSt.com. "In those markets, we didn't have as much offer activity as we normally would have gotten. Submarkets that had an oversupply were already soft, and when COVID hit, it made the situation a lot worse."

The same was true for land pricing. Stable submarkets saw no change in value. For submarkets with declining rents, however, there was a pricing change. "When a developer went to underwrite the land, areas with a lot of rent decline would start with an assumption of a lower rent amount," says Lustig-Bower. "That had a negative impact on the value of the land. That was really submarket specific. In strong submarkets with limited impact from COVID, land costs were not affected."