LOS ANGELES—The multifamily sector is still going strong and rent growth is accelerating, but developers should still exercise caution, said speakers at last week's RealShare Los Angeles' “Multifamily Momentum” panel. Overzealous development in a high-land-price market could lead to developers not achieving the returns they had hoped for, the speakers said.

Moderator Mike Rovner, president of Mike Rovner Construction Inc., said there's lots of demand, but not much supply in the multifamily market. He had the panelists present case studies of multifamily properties they had developed, which ranged from redeveloping a property to make it feel like new to renovating according to workforce rents to creating mixed-use projects.

David Nagel, president and CEO of Decron Propreties Corp., said his firm's goal is to take a class-B property and turn it into an A- with the use of lighting fixtures, finishes and amenities such as gyms. “If we can provide the L.A. Fitness experience, we can raise rents and achieve a healthy ROI of 15%. With that, if you're raising your rent by 25%, you're turning over your entire tenant roster; maybe 10% will stay, but the rest are all new.