The verdict
Returns
Does the deal work? Color-coded metrics against industry benchmarks, the permanent loan sizing, and how the margin holds up across rent × cap rate scenarios.
Program exceeds buildable area
Total building SF (108,000) exceeds buildable area (95,765 SF). Light-industrial FAR typically allows 40–60% of site area. Shrink building sizes or disable buildings to fit the lot under evaluation.
LTC 85% is above the conventional 65–75% range
This assumes the SBA manufacturing loan path (up to ~90% LTC). If HLV does not qualify, conventional lenders will cap near 70% — equity required roughly doubles. Confirm qualification before investor conversations.
Project snapshot — all buildings
Yield on cost (leased basis)
≥9% green / 7.5–9% yellow / <7.5% red
Spread vs cap rate
≥1.5% green / 1.0–1.5% yellow / <1.0% red
Development margin
≥15% green / 5–15% yellow / <5% red
DSCR
≥1.30x green / 1.20–1.30x yellow / <1.20x red
Annual cash flow (stabilized)
Sale profit
Equity returned via sales
Breakeven occupancy
≤80% green / 80–90% yellow / >90% red
Permanent loan sizing — which constraint binds?
Lenders size the loan as the least of three tests. The binding test tells you what the market thinks is thin: LTV = value, DSCR = income coverage, debt yield = income vs loan dollars.
LTV cap (65% × value)
$12,641,772
Binding — sizes the loan
DSCR floor (1.25x)
$13,758,809
Debt yield floor (9%)
$16,207,400
Permanent loan: $12,641,772 · Annual debt service: $1,072,193
What moves this deal — tornado analysis
Each input flexed ±10%, one at a time, measured on development margin. Spend diligence effort where the bars are longest.
Each bar: development margin with that input at −10% and +10% (gold line = base case 39.0%). The longest bars are where diligence money is best spent.
Sensitivity — development margin at rent × cap rate
Each row shifts rent on every leased SF by the difference from the $18.00 baseline, on top of the current per-building mix — the (base) row and column are today’s scenario. If only the base case works, you are not pricing risk. Green ≥15% margin, yellow 5–15%, red below 5%.
| Rent ($/SF NNN) ↓ · Cap rate → | 7.0% | 7.5%(base) | 8.0% | 8.5% | 9.0% |
|---|---|---|---|---|---|
| $14.00 | 19% | 12% | 6% | 1% | -3% |
| $15.00 | 26% | 19% | 13% | 7% | 2% |
| $16.00 | 33% | 26% | 19% | 13% | 8% |
| $17.00 | 40% | 32% | 25% | 19% | 14% |
| $18.00(base) | 47% | 39% | 32% | 25% | 19% |
| $19.00 | 55% | 46% | 38% | 31% | 25% |
| $20.00 | 62% | 52% | 44% | 37% | 30% |