You are contemplating developing a 250 unit apartment complex (average unit size 900 sq. ft.) and want to do a quick feasibility. You expect market rents to be about $2.05 p.s.f. (monthly). Assume a 5% vacancy factor and operating costs at 35% of EGI. Also assume you have the following cost estimates: Land $4,200,000; Hard costs: $93,000/unit; Soft costs: $12,000/unit; Lease-up and carry costs: $7,000/unit. Given this cost structure and the NOI estimate, what would be your estimated return on investment (NOI/Total Cost)?

a. 9.2%

b. 7.9%

c. 10.6%

d. 13.7%