Flex space warehouse development in central VA

[Dilip Jeyram]

Hi community, I've read a lot of posts by very experienced members and I'd appreciate your thoughts on my proposed project..  

I'm considering a JV with a land owner who has about 4 acres in the Fredericksburg area. My plan is to build flex space warehouses. construction will occur in phases. Build on Aprox 1 acre land - one 15000 sqft metal building, 300ftx50ft deep, 24' height. each unit about 24-25' wide with one 12'x16' bay door + glass window+ 48" wide door. So 12 units, each 1250sqft that can be combined per tenant needs.

I'm estimating $125 psqft for buildout of 15k including the land cost. Total about 1.8M.

Lease out as smaller units 16-18 $ psqft. 

thoughts about my financial planning ?

about that market supporting 16$psqft lease?

Is the Central Virginia market good for flex warehouses development? Richmond, Fredericksburg, Harrisonburg, Charlottesville

thanks!

[Henry Clark]

Validate your rental rate. With your agent.  Use loopnet on leased offerings for comparison also.

Cost-  don’t use a per sqft rate.  Break it down. 

 All of the following are wrong.  I’m watching the Jaguars play Monday night; so this list is not complete or accurate.


Land $250,000  1 acre

Permit $25,000

Electric- assume at the front of the property or you need more. $350,000

Sewer Water to each unit?  $250,000. Do you need a lift station?

Fire hydrant- 2 at $10,000 each.  Cover all 4 acres

Mains to hydrants- $100,000

Fire sprinklers?  Dry system  $30,000

Fire extinguishers- hand units  $1,000

Painting parking???

Entrance and sidewalk.  $40,000 assuming no culvert

Driveway with culdesac or turnaround.  $250,000

Doors w chain lift. 12 x $18,000;  insulated add more

Door auto lift?  Additional 12x $5,000

Office?

Bathroom?

Bollards?

Surface runoff, storm drain, storm pond? $0; $100,000; $100,000 adds more land cost

Construction interest at 8%, half value for 1 year say $1mm.  $80,000

Rent up interest only.  Say $2mm balance for  1 year, $160,000

Property tax????

Insurance????

Fence-  4 acres $40,000

Auto gate- $25,000

Security system??? $30,000

Landscaping???

Signage???!

Website???

Realtor-  1 month rent per unit

Legal- $5,000 contracts and deal

Roof type???  Single slope? Standing seam? Membrane?

Insulation- no  $0; spray foam roof and side walls not divider walls $300,000

HVAC????  Wait and split 50/50 with tenant??

Erected Building finally????

Is this a good deal?  What did you miss?  Do you have funds to cover overages?

Start small and Make Your Big Mistakes Early