You are valuing a newly constructed office building in Chesterfield, Missouri. The building has a rentable area of 13,200 square feet and will be occupied by the two tenants listed below.

Tenant	Rentable Area (Square Feet)	Annual Rent per Square Foot
Bank of America	6,000	$30.00
KPMG	7,200	$25.00

Both tenants have signed 10-year leases. Assume that the rental rates will not change during the term of the leases.

Vacancy rate for similar properties in that market is 10%.

Operating expenses are estimated at 50% of the effective gross income.

The current (going-in) cap rate is 8%.

Going-out (terminal) cap rate is estimated at 9%.

The appropriate discount rate (required rate of return) for this investment is 10%.

The investment horizon will be 5 years.

Using the Direct Capitalization approach, what is the estimated market value of the property?