1d • Development
Underwriting for new development deals
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.
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Underwriting for new development deals
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