Assume you have a client with a requirement for a building with 138,000 SF located in the Gowanus, Brooklyn, NY. Total hard and soft costs are $241.5/SF. You are trying to achieve an unleveraged yield of 6.0%. The client is willing to pay a rental rate of $35.0/SF/Yr.

1. Assume a building to land coverage ratio of 50%. At what price will you pay for the land in terms of $/SF of Land Area and achieve your target yield?

Land is being offered to you at $190.00/SF of Land Area. You are trying to achieve an unleveraged yield of 6.0%. What is the target rent that you need to achieve your target yield?

Answer rating: 100% (QA)

Scenario 1 Finding Land Price to Achieve Target Yield Given Building Area138000 SF 50 land coverage ratio Total Hard Soft Costs2415SF Target Unleverag... View the full answer