For my Developer friends... What's your "back-of-the-envelope" ?

[William Morgan]

I find myself coming across more development opportunities and I'm needing some better "back of the envelope" criteria to help separate the wheat from the chaff.  Almost every deal requires spending some amount of pre-development money to bring the project into better focus.  However, at some point you should be able to come to a  go/no-go decision based on the numbers, after which you would kick the deal or renegotiate the price.   So, I'd like to poll my Commercial/Developer friends, what does your "back of the envelope" criteria look like in order for you to proceed with a development project?

1.  Do you look at the projected:  

    - Equity Multiple?  

- IRR?

- COC return?

        - Other?

2. What minimum values do you assign to them? 

    Example:  "I like to see no less than a 2x equity multiple and an IRR of 15% on a 2-year build-out"

Asking for a friend :)