Assume you have a client with a requirement for a building with 114,000 SF located in the Lehigh Valley of PA. Total hard and soft costs are $69/SF. You are trying to achieve an unleveraged yield of 6.0%. The client is willing to pay a rental rate of $4.55/SF/Yr. Assume a building to land coverage ratio of 50%.

1. What is the unit price you will pay for the land in terms of $/SF of Land Area that allows you to achieve your target yield?
   1. 2.31
   2. 3.21
   3. 1.23
   4. 4.56

2. You conduct market research. If land is being offered to you for $2.80/SF, buying at that price allows you to achieve your target yield.

True

False