Sightline-WhereDoesTheRentCheckGo
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Where does the rent check go?
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Cost estimates for typical 6-story apartment building in a close-in Seattle neighborhood
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11/2/2018
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Dan Bertolet - Sightline
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https://www.sightline.org/2018/11/05/whys-the-rent-so-high-for-new-apartments-in-seattle/
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yield on cost5.8%
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number of homes 75
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above-grade SF 68,000
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above-grade construction $/SF
$ 228
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parking stalls 50
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parking construction $/stall $ 50,000
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vacancy rate5%
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annual property tax rate0.956207%
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development costsportion of rent checkrent/home scaled to $2,200rent/homecost/home
cost/building
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marketing0.6% $ 12 $ 14 $ 2,667 $ 200,000
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parking construction (subsidy)
2.0% $ 43 $ 47 $ 33,333 $ 2,500,000
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permitting/utility connection fees
2.0% $ 43 $ 47 $ 9,200 $ 690,000
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developer fee2.0% $ 43 $ 47 $ 9,200 $ 690,000
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construction loan interest + fees
2.4% $ 52 $ 57 $ 11,200 $ 840,000
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design/engineering/legal fees
2.6% $ 57 $ 62 $ 12,133 $ 910,000
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sales/B&O/real estate taxes4.6% $ 102 $ 111 $ 21,867 $ 1,640,000
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land 13.7% $ 301 $ 328 $ 64,533 $ 4,840,000
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construction 39.0% $ 858 $ 935 $ 188,000 $ 14,100,000
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TOTAL development cost69% $ 1,511 $ 1,648 $ 352,133 $ 26,410,000
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private equity investment $ 10,900,000
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private equity investment return
11.3% $ 249 $ 271 $ 53,333 $ 4,000,000
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finished building value $ 30,410,000
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adjustments and operating expenses monthly rent/homemonthly rent/buildingannual rent/building
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parking revenue (offset) $ (117) $ 8,750 $ 105,000
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retail revenue (offset) $ (20) $ 1,500 $ 18,000
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property taxes 14.2% $ 312 $ 340 $ 290,461
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property management5.9% $ 129 $ 140 $ 120,000
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TOTAL100% $ 2,200 $ 2,399
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