We analyzed the 231 E Flagler ST listing by running it through multiple pricing scenarios, taking into account construction costs and potential rents based on the developer’s vision.
Rents for 1,200 SF units in the area range from $2,800/mo to $11,000/mo, heavily influenced by the target market and the building’s unique value proposition.
321 units at 1,200 SF
$3.49/SF/mo residential rents
35% OpEx (operating expenses)
8,000 SF of retail
$65/SF/yr retail rent
$282/SF hard cost
15% soft cost
12,345 SF of demolition at $9/foot
Purchase Price and Return on Cost Relationship
Using these assumptions, we can determine the relationship between the purchase price and return on cost (ROC) as follows:
5.72% ROC – $8,000,000 purchase price
5.50% ROC – $15,000,000 purchase price
5.28% ROC – $23,000,000 purchase price
The NOI is approximately $10M.