Determining Price Per Sq. Ft. for Land | Office Hours
In this episode of the Commercial Real Estate Investor Podcast, we're diving into how to determine price per square foot for land and what you should be paying for industrial sites. Plus, I'll be answering your CRE questions live—from flex space development to marketing triple net properties. We’ll also chat about my latest travels, the power of networking, and how I’m leveling up on LinkedIn.
Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Central: www.crecentral.com
Key Takeaways:
When determining the price per square foot to pay for industrial land for development, survey recent comparable sales in the area to see what the market is paying. Take into account the specific zoning as that can impact pricing.
As a general rule of thumb, you'll want the land cost to be around 20-25% of your total development costs (including hard and soft costs). This can help guide what price per square foot makes sense.
For a 4,000 sq ft commercial space you're looking to lease out, the main marketing strategies suggested are:
Hire a commercial real estate broker to list and market the space
List the space on online marketplaces
Put up a prominent, eye-catching "for lease" sign on the property
When raising capital for commercial real estate projects, the key is to start networking and letting your contacts know you're actively looking for investors, rather than waiting until you have a deal.
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
Episode Transcript:
Tyler Cauble 0:00
This episode of the commercial real estate investor podcast is brought to you by my cre accelerator mastermind, where you'll get access to my step by step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way. Go to www dot cre central.com to learn more. Welcome back to the commercial real estate investor podcast live from the combo group Studios here in Nashville, Tennessee, for another round of office hours, you've got questions about commercial real estate. I might have the answers. Let's see. We'll dive into it. Drop your questions into the live chat. I don't have a Reddit thread for us to dive in today. I figured we'd just talk and answer your questions. Have a conversation around everything, and while you guys are getting those questions ready, I'll dive into some some updates that we've got going on, what's been going on the past week, and what we've got coming up. So cre accelerator, lifetime access is ending February 28 2025 so if you joined before then this is my commercial real estate investor mastermind. We've hit over 100 members, and so we are moving to an annual model for all of the new members, anybody that joins March 1 and after, it will be the same price. It will just be moving to an annual basis. We've had a lot of fun there. It's been incredible to see the impact that we've been able to make with a lot of our investors, and this is really cool. So tonight, I'm headed to Chattanooga. Tomorrow, I'll be in Atlanta because we have a pretty good group, big group of Siri accelerated members down in the Atlanta area that have organized their own two day or three day event. They're having dinner tonight. They've got a full day tomorrow, I'm actually going to be going down there and teaching a class on underwriting. And then Thursday, they're going to be hearing from some private equity firms on how to, you know, raise a bunch of capital and syndicate and all of that fun stuff. It's pretty cool to see how the group has kind of grown to a point where now people are starting to do their own meetups within the group. So cheers to that. Really, really excited to see that. So yeah. Anyway, the lifetime access is inning, so if you want to jump in on that, I would recommend booking a call with me before the end of the month. That is one thing that I will say that is different with with my group than a lot of others. I genuinely care about our mastermind, and I spend a lot of time on it. I personally take every single onboarding call. So if you reach out about joining the mastermind, you will be having a conversation with me about the mastermind and whether or not it's a fit. It's not a fit for everybody, right? And I will tell you that if it's not, but to me, it seems disingenuous to have a sales team taking care of all that stuff, because to me, I don't really care about growing this up to be some massive thing. I just want to do cool deals with cool people, right? That's like my personal motto. I just want to do cool things with cool people. We've got an in person event coming up in Birmingham for the accelerator members, which is shaping up to be a really cool event, really looking forward to that. It will be our second in person event that we've ever done with the accelerator. We're doing those quarterly now. So I mean, now that this one's almost here, it's time to start planning the next one, but it's gonna be fun. We're going down there. We're going to be touring some flex spaces, some car washes, some triple net retail deals, and hearing from one of our students and how he pulled all of that together. We're going to hear two case studies from other students on deals that they have actually done and how they pulled it off. And then I'm going to be teaching a class on how to develop commercial real estate. So it's going to be a great couple of days with everybody. So looking forward to seeing all of you in person. Like I said, this week is a hell of a week of travel for me. I'm going to be in Chattanooga tonight. I mean, I've got a full count, like schedule up until I think my last meeting is at five o'clock or, you know, so that means it probably ends at 530 I will be pretty much going home, packing and leaving for Chattanooga, staying the night there. We've got a broker's mastermind call tonight at seven o'clock, so I will be on the phone, driving to Chattanooga for that call, which is which is really exciting. Luckily, I've got a great partner, Logan Freeman in that mastermind. And he is. He's going to be helping me out with tonight's call, but he crushes the calls Atlanta tomorrow, and then I'm driving back from Atlanta on Thursday and heading straight to Phoenix. I've got a buddy that's getting married this spring, and we're headed off for his. National Party. So that is a lot of travel and a handful of days and a lot of time not being home, which will be, you know, it's always nice to get out, especially going to Phoenix can be a lot warmer than it is here in Nashville. We've got like, a 75% chance of snow tomorrow, but it's a lot of travel. One thing that I wanted to did, want to talk about a little bit is, you know, I also have an executive coach, and I meet with him once a month, and we had a great conversation on Friday. I usually sit down with him for two hours and just run through things he manages, or he's one of the, one of the top partners at a $9 billion private equity fund, and hearing what he's working on always makes me think, like, Okay, I gotta think bigger. I gotta step this up in a completely different way. It's pretty, pretty remarkable. One of the things that I've always been good about is utilizing social media, right? I started off on Instagram, then I started the blog, then we moved into YouTube and the podcast. I've never really been good on LinkedIn, and that was a pretty big portion of our discussion. He's going out here, and their company is acquiring all sorts of businesses right, left and right. They're one of the largest micro cap, small business private equity firms in the world, if not the largest. And he said, you know, LinkedIn brings in a significant portion of his business, and he kind of walked me through how he's utilizing it and sharing the stories and and really just talking more about doing these investments and doing that kind of stuff through that platform. And, you know, there's, there's always one more thing, right? There's always one more social media platform I can be using. There's always one more networking event I can be attending. But we, I decided to take it seriously, right? I mean, if somebody like that is recommending that you do it, you do it. And so I'm hiring a LinkedIn consultant to help me get that off the ground so we can get to a point where we have three to five intense LinkedIn posts per week diving into everything from just behind the scenes to educational content, sharing more of the YouTube and podcast content on LinkedIn clips, all of the fun stuff, carousels, I mean, everything. And so we put together my assistant and I put together a 20 page presentation on our LinkedIn strategy so that we could prep for that executive coaching session on Friday. And it's interesting, you know? I mean, that's, that's the fun side, right? I am a business owner as well. I'm an entrepreneur. That's one thing that I don't talk about too much on this channel, but there's a lot behind the scenes that goes on that's not just pure commercial real estate, leasing, sales and investments, right? There's a lot of business that's being done, and sometimes I enjoy that, sometimes I don't, but it is what it is, right? And it's always exciting to kind of find a new avenue for you, to start directing energy, to just see where it goes. Right? We'll test it out. I don't know if LinkedIn will be the end all be all for us, but I'm willing to give it a shot. So anyway, that's it for my thoughts. What's coming up? It's going to be a busy, busy spring. I'm speaking at the best ever conference the beginning of March. I'm speaking at the mid western Realtors Conference in April, and then hopefully I'm not having to travel too much after that. It'll be a good, slow rest of the year. Joe is saying, how's your morning treating you? Joe, my morning's going great, man. It's pretty good morning so far. Got it in the office at about seven, 715 and just been working before I go live with you guys. So it's always nice to do. Evan is saying, If I'm wanting to build commercial flex space, spring of 2026, how long before construction? Do you recommend pre leasing? I pre leasing? That's a good question. Evan, it depends on the market. It depends on the type of product you're doing, and it depends on if you think that you could get higher rental rates when you're closer to delivering the product. It's always nice to pre lease as early as you can, right? Because that'll give the bank some certainty in giving you a loan, it would give your investors some certainty as well, and giving you a bunch of capital, right? But at the same time, there's also an argument to be made that by the time, like, if it's going to be a nice product, by the time that you deliver it, it's probably going to be an under market rate if you pre release. Now, let me put that in perspective.
When we were working on the wash, the lender wanted us to go ahead and pre release everything before they would release the loan. And I really kicked back on that. I said absolutely not, because once we announced this, I. I think that it will cause a feeding frenzy among smaller restaurant users wanting space like this, because there's nothing like it. And we kind of went back and forth, and finally they agreed, okay, fine, let's let's see how it goes. So that gave us time to put all of our marketing materials together to put our entire program together. And instead of me just listing the property and going to market, we made a massive announcement in the newspaper of you know, hey, look at this crazy new cool restaurant concept coming to East Nashville. Spaces are available. Call us and I signed six leases two weeks from announcing the Pro I guess two weeks from when that article went live in the newspaper, we had six leases signed. Most properties don't ever sign leases like that. They just don't. And I've had plenty of properties that don't but we were able to create a story, create hype around it in a way that, you know, every commercial real estate investor wishes that they could have. And so if you have an opportunity to wait and have a beautiful product and have everything really set up and delivered to where people can see it, I would wait if you can otherwise, you know, maybe your winner just says, Hey, we're not going to do this unless you have 30, 35% of it pre leased. Then, yeah, I just say, go for it. Evan, that's, that's what it's going to take. Begin is saying, Good morning. Tyler, good morning. Vicin, good to see you here. Joe is asking how to determine, or get a better understanding, what price per square foot you need to buy industrial land at for in your market for development, it's good question, Joe. I mean, one, there's there's what makes sense to pay, and then there's what the market pays, right? It makes sense to pay $5 a square foot for dirt, for flex space, but you might be in a market where that kind of dirt is trading for 789, $10 a square foot. It completely depends. What I would do is I would go out and I would survey all of the other industrial parcels that are selling in your area, probably the last six to 12 months, because that's going to be the most comparable to what you're looking at, and just see what price per square foot they're selling for. Now, you'll want to take into account the zoning, because, you know, not all industrial zonings are the same, right, like we've got, you know, I w, D and I G, here in Nashville, and once industrial warehouse. I don't know what the D stands for. I don't know if that's district or distribution, and then industrial general, right? And those are two different industrial zonings. They're relatively similar, right? But there's still some nuances in there. And so sometimes people will pay more for a certain one, just depending on what is actually allowed in that use. So you will want to take that into account. But basically, basically what I've found, I mean, you're typically all in, you want to be all in at, you know, 100 to $120 a foot. So it seems to me like on a price per square foot basis, you're gonna want the land. Because if you're buying an acre for, let's say five bucks a foot. That's $217,000 an acre, right? And you're gonna fit 10,000 square feet on that, give or take. I mean, let's just run some back in napkin math. So that ends up being about, yeah. I mean, those numbers work. It's about 22 to 25% of your all in cost would be for the dirt. So there you go. I mean, you could probably just run 20 to 25% of your total cost for development, all in hard and soft costs. And that'll give you a pretty good rough idea on the number of what you could probably pay. So I mean, if you're, you know, able to build for 120 bucks a foot, then you're probably going to be able to pay, you know, 20 to 20, you know, 20 to 30 bucks a flood for dirt. Give or take. Jonah thoughts on online classes for certificates in real estate, real estate development schools offer like Cornell, warden, etc. Yeah. Yeah, man. I mean, I think they're great. I mean, look, I think that you should always be like, if you're actually interested in commercial real estate, there is nothing wrong with going out and taking more classes and doing everything that you can to one surround yourself with like minded people, right? Because just the discussions alone that you'll have with other people in that class are great. But two, you know, you'll, you'll learn the knowledge. You'll gain the knowledge. But the biggest thing is learning how to apply it, right? And, I mean, we talk about this in the mastermind all the time. It's like, you know, there's, it's not like we have some sort of secret sauce on the education that nobody else has. Yes, I mean, commercial real estate is commercial real estate, right? It's very formulaic. It's learning how to actually apply what you are learning to real world examples that matters, right? And so if you can learn that in a class at Cornell or Wharton, I mean, I would take them in person if you can. I think most of their programs are actually online, and they may not even be with the class. So in that case, I mean, you're really just laying the foundation and getting the knowledge. But yeah, I mean, I think they're great. I mean, look, they're relatively inexpensive. I mean, people spend 20, 25,000 plus a year on collegiate education, and you can go and take those classes for, you know, under five grand, I would assume, right? I mean, that's a hell of a deal. I mean, if you start to compare what that actually looks like, you know? I mean, I spent probably $25,000 on my freshman year at University of Tennessee. Absolutely not worth it whatsoever. I would straight to work and got paid to learn commercial real estate as a commercial real estate broker. So, you know, I'd rather take that route. I think it was a lot. What better. Oh, man, I love this comment. Goldsby rugs, abra, I need your help right now. I found a triple net right next to my effing house. Uh, congrats. Uh, know how to help you, but I hope it's a good one. Let's see. Mikel is saying, how would you want to write a half acre lot that sits on a pretty busy highway, zoned office. The property is in Gwinnett County, Georgia. Thanks, man, Mikel, I mean, that's, it's tough, right? I mean, I don't know what there is to underwrite, like, if you're wanting to build office there, I would probably say, Don't do it. It's 2025, and office is still not doing well, and most banks are probably not going to give you money to go build office. So, I mean, the opportunity there may be to rezone it for something else and flip it right. You may be able to get it pretty cheap if it's if it's zoned office, kind of like I was talking earlier. You know, I would go in on, like, on that flex space deal, I would go in and I would see what the comparable, comparably zoned pieces of land around you, you know, one to two mile, three mile radius, or selling for on a price per square foot basis, and figure out what that would be and how that would apply to your property. And just see if that makes sense, right? If you can rezone it to another piece of property and flip it, then I would say, go check it out. You know that could be, that could be a pretty, pretty good opportunity. But as far as, like, underwriting, I mean, you don't necessarily have to really underwrite simply because there's not, like, there's no income, right? You're basically going to want to flip it unless you're planning on developing it, then that's a totally different story. Maxine is saying, Hello Tyler. Greetings to everyone. Hello, Maxine, thank you for joining us. Oh, goldsby's back. They be acting like I'm trying to rob the place because I want to walk in with a mask to buy it and show up to work with a mat with whit my mask on. Yeah, I don't know that's gonna help you with a triple net property, but I am loving the loving the comments. This is hilarious, Troy, I'm converting a commercial tire shop into a commercial kitchen for food vendors and rented space to keep vehicles. My question is, there's about 4000 square feet that we are thinking of leasing out for triple net. How would you market that? Well, Troy, there's a couple different ways to market properties. One the easiest thing that you could possibly do is hire a commercial real estate broker, list it with them, let them put all the marketing materials together, let them get it out into their network, and let them spend the money on actually marketing it. That is what commercial real estate brokers do, and you don't have to pay them until they actually close a deal. It's the beauty of that type of gig, right? I mean, it is a sales job to the core. So they they don't get anything unless they actually perform. So I love that two you can go and list it on all of the marketplaces online, right? There's a handful of them.
The other thing, obviously, put a sign up, you know, and put a, put a nice, big eye catching sign up. See, a lot of people just give, you know, go down to Home Depot and get one of those four rent signs. That's like, you know, one foot by six inches tall or whatever it is. You can't see that stuff, right? Go out and get an actual sign. I mean, it's, it's going to cost you a few 100 bucks planted in the ground, but it's worth it, so yeah, that's what I would do. And then spread the word. Make sure everybody on your social media that follows you knows that you've got spaces available. Jen is saying opinions on mixed use and commercial real estate in New York City, like you know one. My opinion on New York City is that New York City is still one of the strongest cities in the world when it comes to commercial real estate. I mean, I think, you know, it's easy to look at what was going on in New York City during the pandemic and say, Oh, commercial real estate's dead, but that's, that's an absurd notion, to be honest with you. I mean, the amount of people that live in New York City, the amount of amount of services and restaurants and whatever that they need just to survive on a daily basis is immense. It seems to me like it's coming back pretty strong. Would I invest there? Absolutely not. But that's because I don't understand the market, and I'm not actively in that market anyway. It's also a much bigger market than what I'm used to playing in, right? I mean, you're talking about multiple eight and nine figure deals being like the average, whereas, you know, I can buy properties in East Nashville for under contract on one right now for $400,000 I would much rather play that game. It's a little bit easier, but, I mean, I think it's pretty good. I think New York City is going to be strong for a long time. Really don't see it going anywhere. I mean, it's like London, you know, it's an international hub, and there's just a lot of people there. So it'll always be, it should always be good. Begin to sing. Tyler. Do you know a free app where you can find commercial strip malls on the map when it is for lease or sale? Yeah. I mean, there's, there's a bunch of them, right? Like, there's loop net, there's crack, see, you can go to Craigslist. I mean, there's all, there's all sorts of ones out there that you can jump on and see what's available. Wisco, my buddy's dad is a huge real estate investor, has agreed to partner up with me for certain projects. And I'm wondering if flex space, such as warehouse building one, would be a good place to start. I mean, do you know anything about building flex space? Because if not, you could ruin a pretty good investor relationship. So in my opinion, developing commercial real estate should be the last thing that anybody jumping into commercial real estate does. It is incredibly difficult. It takes a long time. I mean, it's, it's it's intense. You have to know a lot about commercial real estate in order to pull that off. It is far easier to go out and find something that needs a value that's value add, right, whether that's operationally, just making sure things run smoother, whether that's leasing up spaces and filling up vacancies, or whether that's doing actually some physical improvements making the place look better than raising rents. Right? I would go and start on something smaller, impress them, under promise and over deliver and make sure that you can keep them as an investor. Moving forward, you could really mess up pretty big on a first development deal and Wisco. It also comes down to your balance sheet. Man, I mean, do you have the balance sheet to guarantee, like, personally guarantee a loan for flex based development, right? Because it's probably going to cost you somewhere between, you know, a million and 1,000,004 all in to do that. And so, you know, if your buddy's Dad's gonna give you 400 Can you personally guarantee a million dollars in debt? That's what a lot of it comes down to. Let's see. Jaden, have you seen any of the q4 reports coming out of multi family maturities grew from around 600 billion to over 900 billion in 2025 lenders keep pushing. What will this mean for the market? Jaden, to be very honest with you, I don't pay attention too much to the multi family world, simply because I haven't seen deals there since 2018 so there's no point. At some point, it'll all come back and multifamily will be worth investing in again, but not today. I mean, if maturities are growing like that, I mean, if you think about it again, it's 2025, what happened five years ago? Interest rates were entirely different. The environment was entirely different. A lot of those deals that were acquired right around this time, have struggled for five years, right? Because right when they bought it, then the world shut down, and they just never really got it off the ground. And so, you know, I think that there's gonna be a lot of opportunity coming up on the multifamily space or and really just commercial in general, with any kind of maturities coming up, especially considering how high interest rates are comparatively to what they were. I mean, look, I don't think that interest rates are coming down. I really don't. Every banker that I talk to also agrees that they don't think interest rates are coming down. So people that are saying that, you know, maybe they're being optimistic. Maybe they just are really, really hopeful. I would love to see interest rates come down, obviously, but economically, it doesn't make any sense for interest rates to start dropping. So I have a feeling that there's gonna be quite a few properties that just, you know, you. The owners can't refinance them, and they're gonna have to start selling at a discount. So maybe there will be opportunities in multifamily coming up, and if there are, I will be the first to let you know. Let's see. Kaylee is saying is what you talk about, similar to retail, commercial management. Kaylee, can you please clarify the question as to what I'm talking about, retail, commercial management. Are you talking about property management? Let me know. Let's see Goldsby saying back at a McDonald's napkin. Yeah, that's my favorite kind of underwriting. The back of a McDonald's napkin. I would rather do it on the back of a Chick fil A napkin, personally, but I guess that's just me. Michael is saying I was considering wholesaling that lot zoned office to another investor or developer, if possible. Mikhail, I mean, I would say there's like zero demand for developing office today, so I wouldn't even bother spending time on it, if your plan is to just wholesale to somebody else, unless you're getting it for so cheap that somebody else can buy it and then go rezone it and justify it. But you know is what it is. Maxine is saying, Thanks, Tyler. I would love to know of good companies who lend at a low rate to property developers and same, looking for investors who can partner with property investors of property projects in the US and EU. So Maxine, I mean, as far as like Best Companies lending at low rates, they don't exist today anymore, the best like companies that are going to be giving you money, or best lending institutions are just local and regional banks. Right? Unfortunately, interest rates are where they are. I mean, you can kind of assume that we're going to be whatever the 10 year treasury is. Add 200 to 300 basis points to it. That's probably where interest rates are, right, depending on the lending institution. So if the 10 year treasury is at four and a half percent, add 300 basis points, you're probably going to be at about a seven and a half percent interest rate, right? So that's that's just kind of where it's going to be. You may be able to find some private money that's willing to take less. I highly doubt it, because they can make a lot more doing other things. So that's kind of my thought on that. As far as investors you know, partnering with you, out of the US and the EU, I would recommend just starting off with your network, letting everybody that you know, letting them all know that you you're raising capital and doing commercial real estate deals. That's the best way to just start raising capital. I mean, look, if you are interested in doing commercial real estate at all, and you don't have the money for it, you are raising capital today. Make sure that everybody in your network knows you are actively looking for deals, what the deal metrics are that you're looking for, and ask them if they want to invest with you. It's pretty simple, but you got to start today. You can't wait until you find a deal. Everybody always says, Oh, the money will come when you find a deal. That's just, it's not true. I mean, it's not true if you don't know a single investor, how the hell is that money going to come? Right? You got to go and find them. She's saying, looking for investors who can partner with me and loan us money to do various property projects, looking for ways to remortgage with low credit and to take out equity out of the property, please. Maxine, you're asking for the moon. If I, if I had those people, you know, I wouldn't share them. They don't exist. But, you know, best of luck in your search. Oh, man, we got to close it out with gold. I mean, Goldsby is just coming in with the gold today. If I can't snag this triple net, no money down, I'm gonna have to give up 1.2 down payment I could be using on construction, etc, elsewhere. I'm finna. Start raising hell for the triple net. I want it same. Goldsby, same. I'm gonna start raising hell for the triple net deals, because I want them. Appreciate you guys. Thanks for joining. Don't forget, every Tuesday, 8:30am Central Standard Time, we're going live and answering your questions around commercial real estate. Jump in. I'll see you guys in the next one this
episode of the commercial real estate investor podcast is brought to you by my cre accelerator mastermind, where you'll get access to my step by step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way, go to www dot cre central.com to learn more you.
In this episode of the Commercial Real Estate Investor Podcast, we're diving into how to determine price per square foot for land and what you should be paying for industrial sites. Plus, I'll be answering your CRE questions live—from flex space development to marketing triple net properties.