Commerical Development - First Project

[Nate O.]

So I'm about to venture into uncharted territory for myself in the commercial development arena and I'm looking for a crash course on the development side of the project. I have extensive experience in creating buildings (registered architect) but have never really dealt with the financial/investor piece of the puzzle. 

-What I'm looking at project wise:

-$12 mil dollar new commercial office structure (includes cost of property, demo of existing structure, -new construction, build out, holding costs) - higher density urban location

-40k sq. ft. to be rented out at $14-20 sq ft.  per month

-major tenant is on board for 35k of the space at said rates assuming the project falls into place

-2 year construction project

My questions mainly revolve around the financial aspects.
What are main numbers that stand out to an investor in a pro forma?
Does it typically make more sense to look at private investors rather then bank financing?
What types of rates would an investor be looking for a ROI on a project like this? 10% 12%?
What amount of money down (skin in the game) would investors be looking for from the developers?

I'm sure I am missing a ton of relevant information. I'm in the process of putting together all of the numbers for the pro forma so I can get this in front of the right investors. Thanks in advance.

[Dan Wallace]

@Nate O. i just sent you a message. 

I have worked on several projects like this over the years for various banks. Based upon my experience an investor is primarily focused on a risk-rated return. The risk in this type of project is getting the building constructed, within budget, and then leased up. If you have a tenant will the take a large portion of the sq ft then you are starting from a good spot. The risk then shifts very heavily to getting all local municipal entitlements and then being able to execute the project within budget.

From a lender's perspective we are going to look for experience in the developer to get the project done on time and within budget as well as any firm commitments to lease the property.