John Petrovski, group vice president for Heller Real Estate says, "this is a good move for both companies. Related bring financial strength and new leadership, LR brings a pipeline of business and a team on the ground."

Related is entering a market where the vacancy rate from 1988-97 was 7.5% and rents increased by 4% according to the National Multi Housing Council. And like some other major cities, it is seeing older suburbanites moving in now that their children are on their own, increasing the demand for housing.

When it began in 1988 as a two-person firm, LR specialized in building custom residences in vintage buildings. Since then it has branched into ventures including the conversion of warehouses into lofts, luxury single-family homes, rental apartments and mixed-use buildings. One project involved turning the Playboy Mansion into condos.