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Multifamily Builders Upbeat Despite Economy

LOS ANGELES-Though California's apartment market is finally showing signs of cooling, few developers are slashing their number of planned projects. "The very best time to be building is during a slow economic time," says the president of Legacy's residential unit.

By David W. Myers | Updated on November 15, 2001

LOS ANGELES-Some of the nation’s largest developers and other real estate experts agree that California’s red-hot apartment market is finally starting to cool a bit, but few builders say they’re worried enough to begin scaling back on the number of new projects they have planned for the Golden State.

“Rent levels are still looking pretty good,” says Laurie Lustig-Bower, a CB Richard Ellis senior vice president and one of the LA-based firm’s top apartment brokers. “However, people are being more conservative, saying rents will hold firm or increase just slightly.

“In the next five years, I don’t think we are going to see the type of growth rate that we saw in the last five years,” she adds. “I think you are going to see a more conservative investment [scenario] with more usual returns, maybe less than 10% a year.”

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