Use the information provided below to estimate the market value of the office building that has been described.

Type of Property: Office Building Leasable Space: 75,000 square feet Average Rent: $20 per square foot per year

Expected Rent Growth: 3% per year Vacancy and Collection Losses: 10% of potential gross income

Other Income: $1.25 per square foot per year

Expected Growth in Other Income: 3% per year

Going-In Cap Rate: 7%

Going-Out Cap Rate: 7.25%

Selling expenses: 5% of future selling price

Discount rate: 8%

What is the market value of this property according to the direct capitalization approach?