A suburban office/warehouse building is leased to a single tenant on a modified gross lease.

Given the following information, what is the value of the building? The cap rate is 7%.

28,000 SF shell at 38 /SF per month

4,000 SF office within shell at 70 /SF per month surcharge

PGI

Vacancy & Credit Loss (5%)

EGI

Operating Expenses (paid by owner)

Taxes $2,400 / year

Insurance $2,000 / year

Reserves 20 / SF

Misc. 2% of EGI

NOI (Io)

Market Value: