Your client has hired you to assess the financial feasibility of developing a commercially-zoned parcel of land in the County of Henrico, Virginia. Specifics about the properly include: The total area of the subject property is 12.5 acres. You have prepared a schematic layout of the site and determined that once all setback requirements are met and the minimum number of parking spaces are provided that the maximum building size the site can accommodate is 48.000 square feet. The average commercial retail rent in this area is $S2 per building square foot. Sanitary sewer and water service is not presently available to the parcel. Costs to extend public utility lines to the parcelare estimated as follows: o Sanitary sewer extension: $36,000 o Waterline extension: $45,000 In order to achieve acceptable site distance at the entrance to the parcel, road frontage improvements are required. The cost of these improvements is estimated to be $69.000 Site development costs (grading, curb & gutter, etc.) ate estimated to be $375,000 per acre. The cost of constructing the commercial building is estimated to be $110 per building square foot Engineering and architecture fees are estimated to be 10% of the hard costs and building costs. Permit fees are estimated to be $25 per building square foot and plan review fees are estimated at $8.25 per buikdang square foot. The developer will finance the land purchase. The loan terms are 20% down payment equity), and 8.25% for three years. Your client walks away from deals that generate an annual yield of less than 15%. 1. What are the "hard" costs associated with this project (identify the individual cost categories as well as their amounts). 2. What are the "soft" costs associated with this project identify the individual cost categories as well as their amounts). 3. In order to obtain the desired yield, how much can the developer afford to pay for the parcel? 4. If the developer uses a 2-year loan instead of 3 years, how much could the developer afford to pay for the parcel S. If interest rates suddenly drop to 6%, how much could the developer afford to pay for the parcel while still obtaining the desired yield? (Assume the loan duration is once again 3 years) Your client has hired you to assess the financial feasibility of developing a commercially-zoned parcel of land in the County of Henrico, Virginia. Specifics about the properly include: The total area of the subject property is 12.5 acres. You have prepared a schematic layout of the site and determined that once all setback requirements are met and the minimum number of parking spaces are provided that the maximum building size the site can accommodate is 48.000 square feet. The average commercial retail rent in this area is $S2 per building square foot. Sanitary sewer and water service is not presently available to the parcel. Costs to extend public utility lines to the parcelare estimated as follows: o Sanitary sewer extension: $36,000 o Waterline extension: $45,000 In order to achieve acceptable site distance at the entrance to the parcel, road frontage improvements are required. The cost of these improvements is estimated to be $69.000 Site development costs (grading, curb & gutter, etc.) ate estimated to be $375,000 per acre. The cost of constructing the commercial building is estimated to be $110 per building square foot Engineering and architecture fees are estimated to be 10% of the hard costs and building costs. Permit fees are estimated to be $25 per building square foot and plan review fees are estimated at $8.25 per buikdang square foot. The developer will finance the land purchase. The loan terms are 20% down payment equity), and 8.25% for three years. Your client walks away from deals that generate an annual yield of less than 15%. 1. What are the "hard" costs associated with this project (identify the individual cost categories as well as their amounts). 2. What are the "soft" costs associated with this project identify the individual cost categories as well as their amounts). 3. In order to obtain the desired yield, how much can the developer afford to pay for the parcel? 4. If the developer uses a 2-year loan instead of 3 years, how much could the developer afford to pay for the parcel S. If interest rates suddenly drop to 6%, how much could the developer afford to pay for the parcel while still obtaining the desired yield? (Assume the loan duration is once again 3 years)