Spec Industrial construction - Debt underwriting/sizing

I would be curious to know how other lenders are underwriting/sizing spec industrial construction loans. LTC, DY, DSCR, how they underwrite NOI, etc. Specifically focused on traditional bank/senior balance sheet loans vs. higher-leverage debt funds and/or deals with a mezz component, though that would be interesting to hear about too.

Any input would be appreciated, from all sides of the coin - fellow lenders, brokers, developers, PE/LP folks, etc.

I'm in originations (senior secured balance sheet loans at a top 10 bank) and am constantly losing or passing on spec industrial opportunities because we can't get deals to pencil-out at our target underwriting parameters. Obviously deals are tight across the board with constructions costs and cap rate compression, but I still think our own sizing metrics are too conservative. Even getting to 60% LTC is often a struggle.

Basically, to make a deal work I need it to be 10% DY on developer proforma NOI, because we are going to haircut the NOI down to a 9% and a 9% DY is what the credit guys want (at minimum!) Which is not realistic because 10% DY deals rarely exist at the leverage points being requested in the market (65% LTC +/-)

A typical example:

• Sponsor sends us a 60% LTC deal and their proforma is showing a 9.0% DY. We hit their NOI with a minimum 5% vacancy (they are showing 0% because why not, realistically the building is going to be either 0% leased or 100%, assuming one tenant) and $0.15 PSF replacement reserves. This usually results in an 8-10% overall haircut to borrower's NOI. This is also assuming we're fine with their proforma rent (sometimes we're not and ding the rents, which further decreases NOI).
• So now, the original 9% DY is an 8.25%.
• For many, an 8.25% DY is healthy, but my firm primarily focuses on DSCR. For industrial we're using a 6.81% mortgage constant (5.5%/30-yr). So that 8.25% DY = 1.21x DSCR. For spec industrial construction we want to be at a 1.35x-1.40x DSCR (9.2-9.5% DY). The only way to get there is to cut proceeds from 60% to 55% LTC.

Note - I'm specifically talking non-recourse financing. Generally working with top/institutional developers & equity players in the market, loans from $30-$80MM.

I know getting deals to pencil is a constant challenge for everyone, but it's frustrating when I'm constantly 5% lower on leverage than the competition.

Any other lenders in the same boat? How far off-market is targeting 9-10% DY on new spec industrial construction?