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KOSMONT REALTY | 12 <br />DEVELOPER UNDERWRITING – MACRO MARKET FACTORS <br />Factors impacting development feasibility that are generally determined by the “market” <br />include: <br />Market valuation – capitalization rates, market rates of return for different assets, <br />value of development upon completion <br />Access to capital – lender / investor interest, lending ratios, risk tolerance <br />Interest rates – cost of borrowing money during construction and upon completion <br />Inflation – cost of construction materials and construction labor, insurance costs <br />Revenue growth – rent growth, sales price growth