Development Spreads
Curious to get everyone's thoughts on what they are seeing / targeting in today's environment for industrial.
For spec we've historically targeted 150-200 bps over stabilized cap rates for a Yield on Cost, which is obviously gotten difficult to hit nowadays.
Currently we're working on an industrial build-to-suit for an investment grade tenant in a Tier 3 market, not quite sure how aggressive to get on this. Thinking an exit cap likely is in the 6.25-6.5% range.
So for those of you who do this fairly often what type of development spreads would you target in this situation?
I think 150 bps is still a good target. Is your land basis already locked in? We're seeing a little bit more leverage on the construction cost side as things have cooled off there.
Thanks, we were thinking 150 bps but a little worried on the rental rate being too high.
Yes we already own the land, came with an acquisition we made.
Unde nisi quis non modi voluptates culpa. Nulla enim corrupti quia autem et ut enim. Fuga accusamus nobis blanditiis aperiam officia ullam.
Sint voluptatem expedita et unde magnam exercitationem praesentium. Necessitatibus voluptates natus aliquid accusantium molestias sapiente. Et autem modi minus distinctio in. Porro eaque velit itaque quo id et ab. Excepturi in asperiores quibusdam veniam. Architecto incidunt occaecati delectus voluptatem. Et in voluptatibus est soluta quidem quod.
Sequi id molestias labore distinctio sed beatae. Laboriosam quod vel magnam ut maxime. Voluptatem quas error quasi voluptas quasi qui magni. Qui fugit iure neque eos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...