Required Rate of Return on real estate investment.

Dear All,

How would you calculate the required rate of return for a special purpose vehicle which buys real estate (with 90% debt) and lends it to the government ("certain cash flows") and guaranties the maintenance of the building.

* Leveraging industry betas would give a distorted result, as the SPV is extremely geared.
* Lease/rent payments divided by the property values of similar projects would be a potential solution, but each project is unique, so it's difficult to compare/find data
* Any suggestions ?
* Could you suggest pa

Question

Required Rate of Return on real estate investment.

Dear All,

How would you calculate the required rate of return for a special purpose vehicle which buys real estate (with 90% debt) and lends it to the government ("certain cash flows") and guaranties the maintenance of the building.

* Leveraging industry betas would give a distorted result, as the SPV is extremely geared.
* Lease/rent payments divided by the property values of similar projects would be a potential solution, but each project is unique, so it's difficult to compare/find data
* Any suggestions ?
* Could you suggest pa