Curious to know those who are developing from raw land what is the max price to pay per acre to get the deal to pencil. If we go too far away from somewhat metro areas the land becomes cheaper but it doesn't command the mid teens rent. I just did a site/building estimate for 23,100 SF comprised of two buildings with 7 each 30x55 suites on 3 acres. The asking price on the land is $257k/acre zoned for small bay and the site is mostly flat with stone base in place, was used for a trucking company laydown yard. With no contractor OH&P and limited general conditions the site cost is $33/sf, building at $71/sf, land/capital/soft cost $61/sf and assuming $15/sf NNN, NOI $283k, 30% equity = DSCR at 1.19.

What market are you investing in or targeting? Drop your city below.

I am a partner with Privateer Development based in Chattanooga, TN. My partner, Chris Griffin Core Construction, who is in this group. We both come from commercial general contracting for the past 25+ years. We own a 7500 3 tenant small bay in Chattanooga and have been actively looking for more to redevelop. Have looked at building new flex/small bay but with land cost in our area the deals do not pencil unless we build 30,000 SF or more so we are focused on buying existing between 4000 - 20000 SF. My background is in development management, estimating and project management. I also run an estimating consulting firm where I estimate for subs, GC's & developers. Happy to help with evaluating site & building cost.

One of the most useful things I've learned in small bay industrial is that the best tenants are often the ones you didn't go looking for. I've had auto detailers, food producers, personal trainers, specialty fabricators, and a few businesses I still can't fully explain walk through my doors. Some became my longest-tenured tenants. Some were gone in 18 months. The tenant mix in small bay is genuinely different from anything you'd underwrite on paper. What's the most unexpected tenant you've had — or seen — in a small bay building? And did it work out?