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Rental Underwriting & Returns

The numbers that decide whether you build: NOI, yield on cost, the spread to market cap rates, and what the finished project should be worth. Then flip the same project to a condo-sale exit and compare.

Project & income

Total development cost $ Building SF

Units Rent $/SF/yr (NNN)

Yard / other income $/yr CAM/NNN recovery $/yr

Stabilized occupancy % Operating expense %

Market cap rate % Annual rent growth %

Condo-sale alternative

Sale price $/SF Selling costs %

HOA setup + legal $ Sales velocity (units/mo)

Cap-rate sensitivity

Build & hold vs. build & sell

Deciding between the two? Read Should you build rentals or sell industrial condos?