Question: You are contemplating developing a 245 unit apartment complex (average unit size 900 sq. ft.) and want to do a quick feasibility. You expect market

You are contemplating developing a 245 unit apartment complex (average unit size 900 sq. ft.) and want to do a quick feasibility. You expect market rents to be about $2.10 p.s.f. (monthly). Assume the following: 5% vacancy factor; operating costs at 35% of EGI; Land $3,200,000; Hard costs: $93,000/unit; Soft costs: $12,000/unit; Lease-up and carry costs: $7,000/unit. Given all these assumptions, construct a quick proforma and estimate the return on investment (NOI/Total Cost)?

A. 6.9%

B. 11.2%

C. 13.8%

D. 15.6%

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