A 24-acre site can be purchased. The site is zoned for one-story office development. Zoning allows for lot coverage of 35%, (Paved areas count as coverage in addition to buildings in this zoning code.) and the project requires 165,904 square feet of pavement for parking and vehicle maneuvering. A general contractor quotes a GMP contract price of $110.00 per square foot, including adequate contingency and contractors fee. Soft costs, including development fee and contingency are $25 per square foot. Pro-forma rents are $20.00 per square foot (NNN), expenses are $4.00 per square foot and real estate taxes are $5.00 per square foot. An engineering firm will pre-lease 50,000 square feet of the building at $18.00 per square foot (NNN). It will take 12 months to build the building and a construction loan is available for 70% of hard and soft costs at an interest rate of 7.5% (interest only). Assume that the average percentage of the loan that is outstanding for the year-long construction period is 50%.

1. How big of a building can you build? Blank 1 (round to the nearest square foot) What is the interest expense per square foot in this budget? Blank 2 (do not include a dollar sign and round to the nearest 0.00)
2. Whatcouldyoupayforthelandpersquarefootofbuildingtoearn10.5%oncost(assumea5%overallvacancyfactor)?Blank3(donotincludeadollarsignandroundtothenearest0.00)

Based on the information in the previous question:

1. What is the average overall NNN rent you could charge to yield 12% if you pay the price for land as answered in (3.) above and vacancy remains at 5%? [4](do not include a dollar sign and round to the nearest 0.00)
2. What is the breakeven occupancy level before debt service at completion and lease-up? [5] (round to the nearest whole percent e.g. 50%)