A building in Juja town which house colleges has the following attributes: (i) The building was built in 2018 and has 300,000 square feet of rentable area. (ii) There would be an initial renovation cost of Sh. 3 m. (iii) The expected vacancy rates in the first two years are 30% and 20% respectively. (iv) The market rents in the building are expected to average Sh. 15 per square feet for the first two years. (v) The variable operating expenses are expected to be Sh. 3 per square feet for the first two years. The fixed operating expenses are expected to be Ksh. 300,000 for the first two years. (vi) Real estate taxes are expected to amount to Sh. 300,000 in the first two years. (vii) The tax rate on income is assumed to be 40%. (viii) The cost of borrowing is assumed to be 8% pre-tax and that the building will be financed with 30% equity and 70% debt with equity both being 1.3. (ix) A survey suggests that equity investors in real estate requires a return of 12% on their investment. Required: Estimate the value of the building based upon the expected cash flows and assuming that the terminal year is year 3.