A single tenant property measures 200,000 SF. It has a tenant paying an in-place rent of $70/SF/Yr and operating expenses of $40/SF/Yr. The lease is month-to-month. Based on market levels, the rent should be $67/SF/Yr. The property is up for sale and the prevailing cap rate for this type of property is 5.5%. By how much would a buyer over pay if they purchased the property based on the in-place rent?

$5.9M

$19M

$10.9M

$8.8M