How do I estimate construction cost and development yield for a multifamily project?

Estimate multifamily construction cost by building type (garden, wood-frame podium or concrete high-rise) as a cost per gross square foot plus parking, site work and soft costs. Development yield, or yield on cost, is stabilized NOI divided by total project cost. Compare it with market cap rates: the spread between the two is your development margin. Construction cost, line by line - Hard costs: cost per gross square foot for the building type in your market, plus structured parking per stall if needed. - Site work: grading, utilities, demolition and offsite improvements. - Soft costs: design, engineering, permits, impact fees, legal, insurance, often a meaningful share of hard costs. - Financing: construction interest and fees over the build and lease-up period. - Contingency: a percentage of hard costs for overruns. - Land: purchase price and closing costs. Development yield 1. Stabilized NOI: units times market rent, minus vacancy, minus operating expenses. 2. Total project cost: land plus all costs above. 3. Yield on cost = stabilized NOI / total project cost. 4. Development spread = yield on cost minus the market cap rate for similar stabilized assets. How to read the result A thin spread leaves no room for cost overruns, slower lease-up or a higher exit cap rate. Developers and their capital partners generally want a meaningful cushion before committing. Sensitivities to run Hard costs up 10 percent, rents down 5 percent, lease-up six months slower, exit cap rate up 50 basis points. How Titleman helps Titleman builds the feasibility model with yield on cost and sensitivities, pulls rent comps for new product nearby and shows every assumption so you can change it. See how Deal Review works: https://titleman.ai/products/deal-review