As an owner of Murooj Investment Company, you are considering the purchase of land that could be developed into an office project. At the present time, you believe that the site could support a 150,000 rentable square foot project with average rents of $25 per square foot and operating expenses of $13 per square foot. You also expect rents to grow at 5% indefinitely and believe that you should earn a 14% return (r) on investment. The building would cost $100 per square foot to build.
What would the estimated property value and land value be under the above assumptions?