By Jay Parsons, Greg Willett and Carl Whitaker Apartment developers – and the funding backing them – face an unprecedented predicament in 2021. The landscape offers opportunity but also plenty of traps that could doom certain types of projects. Due diligence and site feasibility are always important but too often become a rubber-stamp process. That might have been okay in the past decade, when a hot market boosted pretty much everyone. But 2.5 million new apartment units and 1 pandemic later, it’s time to take a more thoughtful approach. What types of projects make the most sense? What locations, amenities and finish-outs? Here are 3 themes to plan around for new development, plus ideas to drive a successful new development strategy in 2021 and beyond. 1. Plan for tomorrow ― not today and not yesterday Coming out of the Great Financial Crisis, one common mistake developers made was in assuming that renters would continue to prefer small unit sizes. It turned out that was a consequence of the downturn and not an actual preference once economic confidence improved. Some developers then struggled to lease out those tiny units, and average unit sizes later expanded again. In 2021, developers must confront the challenge of building apartments for a POST-pandemic world. That world won’t look like the lockdown era of the pandemic, nor will it necessarily mirror the pre-pandemic norms. What does that new normal look like? It’s an unclear picture at this point, but we should expect future apartment renters to spend more time (though not 24/7) on-site than they did pre-pandemic. Implications are balanced between big picture and individual benefits: Build units with flexible living spaces where residents can comfortably work from home. The keyword is “flexible.” You don’t want to build dedicated office space. Think about your entire outdoor space – not just the pool area. Some residents will spend more time on-s...

By Jay Parsons, Greg Willett and Carl Whitaker Apartment developers – and the funding backing them – face an unprecedented predicament in 2021. The landscape offers opportunity but also plenty of traps that could doom certain types of projects. Due diligence and site feasibility are always important but too often become a rubber-stamp process. That might have been okay in the past decade, when a hot market boosted pretty much everyone. But 2.5 million new apartment units and 1 pandemic later, it’s time to take a more thoughtful approach. What types of projects make the most sense? What locations, amenities and finish-outs? Here are 3 themes to plan around for new development, plus ideas to drive a successful new development strategy in 2021 and beyond. 1. Plan for tomorrow ― not today and not yesterday Coming out of the Great Financial Crisis, one common mistake developers made was in assuming that renters would continue to prefer small unit sizes. It turned out that was a consequence of the downturn and not an actual preference once economic confidence improved. Some developers then struggled to lease out those tiny units, and average unit sizes later expanded again. In 2021, developers must confront the challenge of building apartments for a POST-pandemic world. That world won’t look like the lockdown era of the pandemic, nor will it necessarily mirror the pre-pandemic norms. What does that new normal look like? It’s an unclear picture at this point, but we should expect future apartment renters to spend more time (though not 24/7) on-site than they did pre-pandemic. Implications are balanced between big picture and individual benefits: Build units with flexible living spaces where residents can comfortably work from home. The keyword is “flexible.” You don’t want to build dedicated office space. Think about your entire outdoor space – not just the pool area. Some residents will spend more time on-s...