Jesse Rоsen оf Rоsen Development Compаny, is considering developing а 6-story LEED certified office building in Mountаin View, CA. The property will consists of six floors of 50,000 SF each. The property will be certified at the gold level with a green roof and photosensitive curtain wall. Rosen Development Company has the option on the land to purchase the property for $5,000,000. Before Rosen Development Company exercises the option on the land, Jesse wants to run a quick “back of the envelope” development feasibility analysis for the project. Jesse is very experienced in the Silicon Valley markets and wants a 10% development yield to take on the development risk. Below are the other assumptions he makes about the market. · Hard construction costs (material and labor) are $120.00/Gross SF (GSF)· Soft costs are $15.00/GSF· Rents are $40.00/Leasable SF (LSF)· Operating costs $10/GSF· Vacancy rate 5%· Loss factor 25% Based on the information above, what is the projected development yield on the proposed project?