The subject property is a $5,000$ sf single tenant office building that is currently leased for $$9\mathrm{.}00$ per sf per year with three years remaining on the lease. The current lease is assignable. Typical total vacancy$/$credit loss for this type of property is $10\%$

per year. Owner expenses are typically found to be $25\%$ of the effective gross income. Market rent rates are $$12\mathrm{.}00$ per sf per year. Market overall rates are $9\mathrm{.}5\%.$ In the data collection, a sale of a leased interest was sold for $$29,000$ with a net leasehold income of $$12,000$ per year with three years remaining.

What is he discount rate applicable to the leasehold estate?