What happens when you combine strategic land acquisition, a booming suburban market, and smart financial planning?
You get a compelling case study in commercial real estate development.
This case study takes a deep dive into a flex office/warehouse development project located in Little Elm, Texas — just outside Dallas. With five buildings totaling ~26,000 square feet, this build targets the growing demand for smaller, flexible industrial units catering to tradespeople, entrepreneurs, and logistics-based tenants.
Let’s break down the numbers — and the lessons — behind this profitable project.
Project Snapshot
- Location: Little Elm, Texas (Dallas suburbs)
- Lot Size: 2.3 acres
- Buildings: 5 flex office/warehouse structures
- Total SF: ~26,000
- Units: 16 total (1,200–1,500 SF each)
- Unit Layout: ~90% warehouse, ~10% office + restroom
The Financial Breakdown
| Cost Category | Total |
|---|---|
| Land (incl. closing) | $450,000 |
| Soft Costs (design, engineering, feasibility) | $65,500 |
| Site Development (grading, utilities, paving) | $586,000 |
| Vertical Construction (buildings, finish-out) | $1,148,000 |
| TOTAL PROJECT COST | $2,249,700 |
- Cost Per SF (incl. land): ~$90.00
- Cost Per SF (excl. land): $70.00
Revenue Model (Estimated)
Note: Estimates may vary based on local rental comps and lease structure (NNN assumed).
- Unit Size Range: 1,200 – 1,500 SF
- Estimated Rent: $14–$18/SF NNN
- Annual Gross Revenue (full occupancy): ~$364,000 – $468,000
- Target Cap Rate: 6.5% – 7.5%
- Valuation at 7% Cap: ~$4.7M
- Est. Profit Margin: ~100%+ potential upside
Key Investment Takeaways
- Flex Space is in Demand: Ideal for small businesses, hybrid work models, and last-mile logistics.
- Low Vacancy Risk: Multiple small tenants diversify income and reduce exposure.
- Simplified Construction: Metal buildings with modular layouts mean faster builds and fewer surprises.
- Strong Cash Flow Potential: NNN leases and manageable operating expenses make this a cash-generating machine.
Final Thoughts
This project is a textbook example of niche development success — especially in high-growth suburban markets.
By focusing on affordability, flexibility, and tenant demand, this Little Elm development checks all the boxes for a long-term cash-flowing asset.
Want to build something similar? Let’s connect.
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Drop a comment below or share this post with someone looking to break into commercial development. Have questions about costs, zoning, or feasibility? I’m happy to help.
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