current LPs / GPs development & value add returns

[Account Closed]

What kind of returns are you currently seeing in your market for multifamily and industrial value add and development deals?

What are your current underwriting assumptions and thresholds?

Assume a project cost in the 10-50mm range in gateway / primary markets

90/10 deal

I currently use the following UW Assumptions:

cap rate expansion: 5-10 bps per year

rent growth: 2-2.5% annual

Product type:                      mid rise affordable MF spec development

Term:                                 3 yrs hold

YOC:                                   6-7%

Trended ROC/spread:          150 bps > exit cap

LIRR:                                   16-17%

EM:                                      2x

LTC:                                    65%

LPs pref:                              9%

Waterfall:                            80/20 to 13%

                                           70/30 to 18%

                                           65/35 thereafter

Look forward to what others have to say