How a rural build to suit penciled at under $900,000 with a lease signed before the slab was poured
Ground up commercial is widely assumed to require a different zip code and a different net worth, and this case is worth studying because it does not. An operator buys 1.8 acres on a state highway corridor outside Macon, Missouri for $38,000 in early 2023. Nothing entitled, no broker involved, a direct call to the landowner. Before any permit gets pulled, he secures a seven year NNN letter of intent from a regional farm supply tenant. That letter of intent is what changes the capital structure. The construction lender comes in at 70 percent of cost once it exists, which leaves roughly $140,000 of the operator's own money in a building that pencils at a 7.1 yield on cost against a 6.6 cap rate exit. All in under $900,000. The sequence is the lesson here. The tenant commitment comes before the debt, and the debt comes before any dirt work, on a corridor most investors never underwrite because they assume commercial development starts somewhere larger.
