Question: You are a developer, looking to acquire a 65-acre site for an 848,000 SF speculative distribution building. Hard + soft costs for the building will

You are a developer, looking to acquire a 65-acre site for an 848,000 SF speculative distribution building.

Hard + soft costs for the building will total $54 per SF of building. Your required entrepreneurial incentive is 7%.

You have projected NOI for the building of $3.85 per SF of building. Market cap rates are 5%.

What is the land residual/maximum amount per acre you can pay in order to have a feasible development?

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