current market returns and uw standards for new developments and value add deals

What kind of returns are you currently seeing in your market for value add and development deals?
What are your current underwriting assumptions and thresholds? what are the most common waterfall structures you see for MF & industrial spec?
Assume a project cost in the 10-50mm range in a gateway / primary market
90/10 deal

I currently consider the following UW Assumptions:

cap rate expansion: 5-10 bps per year
rent growth: 2-2.5%

Project type: MF spec development (mid rise, affordable)
Term: 3 yrs hold
YOC: 6-7%
Trended ROC/spread: 150 bps > exit cap
LIRR: 17%
EM: 1.6x
LTC: 65%
LPs pref: 9%
Waterfall: 80/20 to 13%
70/30 to 18%
65/35 thereafter

are these numbers still relevant? curious to see where the market is right now

 

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