How do I determine the optimal use of leverage for a RE development project?

I am trying to make a cash flow projection for a hypothetical investment project, and as part of this I want to compute a levered and unlevered IRR. I am a bit confused how to enter the debt into the equation though, because the company is a publicly traded company and it will be financing all operations off its balance sheet. It's not as though it would be taking out a loan from a bank.

If the company is financing the project entirely with company stock, but the company already has a debt to equity ratio of about 1, does this mean that I can simply use 50% of the project costs as the amount of debt for the project? Or does it not work that way?

Also, how would I compute the optimal level of debt to be used? My understanding is that REIT's don't have corporate tax, so there is no tax advantage to debt. Would I just compute the WACC at different debt levels without taxes and find the lowest one, and use that as the debt level?

Sorry, I am very new to this.

 

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