You are considering an investment in a 250,000 sqft office building.Market rent in this area is currently $25/sqft and is expected to increase at a rate of 5% annually into the foreseeable future.Comparable buildings in this area have a 6% vacancy rate.Expenses are currently $13/sqft and have been increasing by $1/sqft annually. Typically half of the operating expenses are recovered from tenants.When getting into a project of this type you generally consider a 5-year holding period and look for a 12% rate of return.

You have information on two similar properties that sold within the last 6 months.Comparable A has NOI $4 million of and sold for $47 million, and comparable B has NOI of $5.25 million and sold for $55 million.Applying that market capitalization rate as your subject property's terminal capitalization rate, what is the current value of your subject property?