A developer plans to start construction of a building in one year if at that point rent levels make construction feasible. At that time the building will cost $1,000,000 to construct. During the first year after construction would take place, there is a 60% chance that NOI will be $150,000 and a 40% chance that the NOI will be $75,000. In either case, NOI would be expected to increase at 2% per year after the first year. How much should the developer be willing to pay for the land if he wants a 12% rate of return?