I need help determining the market value on my apartment complex

[Steve Davis]

I am building an 18 unit apartment complex late spring to be completed in 2023. I live in Canada. So cap rates are generally low, construction costs are high thus the overall real estate in my market and City I live in is expensive. I am looking to sell my building in and around the $8.5MM range. A 16 unit apartment in the same area as where I am building got listed a few days ago for $5.5MM. This building was built in 2014 (out dated see pictures) and the City was completely different and small town vibe even if it was only 8 years ago. Rents are significantly under rented. Below is my pro forma for the two properties the one I am building is Bevan Ave. From an income approach the numbers work for me but from a cost per unit approach it does not. I am wondering which method I should be more dependent on. Please feel free to read below and help me out. Thank you.

Sutherland Ave Apartment

List price: $5.5M

16x units

Year Built: 2014

Similar location to future Bevan Ave development

Laminate, old carpet, outdated … could almost say it needs renovations. See pics

Gross annual income: $250k

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Using income approach with cap rate

$250k x 0.8 = $200k / 0.0366 = $5,464,480 value (3.6 cap rate with 20% operating expenses (newer building but still operating expenses quite low))

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Future Bevan Ave development

Desired price: $8.5M

18x units

Year built: 2023

Finishes: Quartz, new

Projected gross annual income: $384k

Using income approach with cap rate:

$384k x 0.8 = $307,200 / 0.0366 = $8,393,442 (3.6 cap rate with 20% operating expenses (brand new building 20% operating expenses more realistic)

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Comparing the properties by gross income. $384k (Bevan) - $250k (sutherland) = $134k x 0.8 = $107,200 / 0.0366 = $2,928,961 therefore Bevan is $3MM more valuable. Strictly from an income point of view.

INCOME APPROACH VS COST PER UNIT !!!??

My concerns…

SUTHERLAND: 16x units at $5.5MM is $343,750 per unit …

Therefore Bevan has 2 more units so … $343,750 x 18 = $6,187,500

What is a more valuable and an accurate measurement? cost per unit or income approach using cap rate?

Any information and input is appreciated! Thanks!