How do I analyse a new 5 unit strip mall in an industrial center?

[David Jiang]

Hey everyone, I'm looking to move on a piece of land located in a pretty remote location at the entrance of a large industrial park. The reasoning behind it is the industrial park has shown substantial growth in the past few years and looking to add some big tenants in the near future but is currently undeserved in the commercial space (resturaunts, banks, convenience store, etc). 

I found an offer for a roughly one acre piece of land, well situated at a main cross roads in the park, with the grading of the land already complete. My question is how do I go about calculating the value of the land based on the income potential of building a 5 unit strip mall when there's absolutely no similar comps for miles?

My back of the napkin calculations are: the land is offered at $8/sqft so i figured 8 x 1 acre = ~$350k. Cost to build a 10,000 sqft building @ roughly $100 per sqft is $1 mil. So total cost is about $1.4mil, give or take.

If rent per unit is $2/sqft x 10,000 x 10 (accounting for vacancies and misc costs) = $200,000/yr

So Cap Rate is about 14.3%.

Now with that being said, I'm almost certain there's other costs that will creep up which will lower the Cap but this is a great start worth pursuing I think.

Can you guys give me some advice on what these likely costs are and whether my numbers make sense? If anyone has any experience with similar properties please let me know what your experience. Thanks!