Sammle's Club wants to buy a $320,000-$square$-$feet distribution facility on the northern edge of a large midwestern

city. The subject facility is currently renting for $$5\mathrm{.}4$ per square foot Based on recent market activity, two propertles

have sold within a two$-$mile distance from the subject facility and are very comparable in size, design, and age. One

facility is $350,000$ square feet and is presently beling leased for $$5\mathrm{.}30$ per square foot annually. The second facility

contains $300,000$ square feet and is beling leased for $$5\mathrm{.}50$ per square foot. Market data Indicates that current

vacancles and operating expenses should run approximately $50$ percent of gross income for these facilitles. The

first facility sold for $$11\mathrm{.}8$ million, and the second sold for $$10\mathrm{.}3$ million.

Required:

a$.$ Using a going$-$In or direct capitalization rate approach to value, how would you estimate value for the subject

distribution facility? $($Do not round intermediate calculations. Round your final answers to $2$ decimal places.$)$