Flex Space Development - Still Viable?

[Bennet Sebastian]

I may be a little late to the game but I've been hearing about how hot flex space is for a few years now and currently considering undertaking a new flex development project here in central Florida. I've identified a 2.25 acre properly zoned greenfield parcel with offsite retention that looks like will yield around 20,000sf of buildable area across multiple buildings. All utilities and power appear to run adjacent to the parcel. 

I think the market for small bay flex space is right around $15/SF NNN and I would want to achieve a 10% cap rate going in and an 8% cap exit. Therefore I need to be at $150/SF all in including land. I don't think that's doable unless its a bare bones metal building which the city may not allow and which would also not command $15 rent.

Here is my expected cost:

Land: $475k

Acquisition Costs (Environmental, Survey, Geotech, Traffic Study): $25k

Soft Costs (Engineering, architect, impact fees, permit, legal, closing costs, taxes, interim interest): $300k

Site Development Costs: (Earthwork, underground utilities, curb cuts, fencing, stormwater, paving, landscaping): $800k ($400k/acre)

Subtotal before vertical costs: $1,600,000 ($80/SF). 

This only leaves $70/SF for vertical costs which I don't think is feasible. The metal shell package will only be $30/SF but by the time you add in foundation, slab, MEPs, doors/windows and framing and any sort of architectural facade I think the vertical cost will be well over $100/SF. Maybe developing flex space made sense three years ago when construction inputs were significantly less but not sure it really works today. I have been speaking to the folks at Hamza Invests and they are confident that it can be delivered for much less based on my land costs but I don't want to fork over the money for their program and find out my instincts were right. 

Anyone here able to shed some light on this?