New Construction Valuation approach

[Timothy Munger]

If you have a shovel ready property to possibly sell or to value on a pro forma for a bank. How do you value it? Is this approach logical?

Using established value of made up property from a CAP rate of 6% say $1 million dollars.
If hard costs are $500k and soft costs are $100k
$1 million minus $500k minus $100k would give us a property worth of $400k. Would that be a fair assessment? Thanks