The value for storage units is essentially a going concern value. You should look at at least 3 prior years of NET annual operating income for establishing a reasonable average annual NOI. However, it is imperative that you examine area capitalization rates for a variety of recent sales in order to determine current investor perceptions in the market place. You should also attempt to do a mortgage-equity calculation utilizing typical equity yield rates, anticipated mortage rates, period of hold and equity build up, and anticipated appreciation. A comparison of the market and calculated rate should provide a good estimate of the capitalization rate. Remember, there is a significant resulting value difference in only a 1% difference in the capitalization rate, i.e. 8% versus 9%. If the showroom and home are necessary for the operation of the business their value is part of the resulting value through capitalization.
Sep 23, 2010