Sell a Self-Storage Facility in Norfolk, VA

Selling a Norfolk, VA self-storage facility comes down to occupancy, rental rates and the condition of the doors, roofs and paving. Prominent Cash Offer buys Norfolk, VA self-storage facilities as they are, tenants in place, with a written cash offer based on the income the facility actually earns, whether it's a few dozen drive-up units or a multi-building, climate-controlled facility.

How a self-storage facility in Norfolk, VA is valued: net operating income

Buyers of self-storage facilities in Norfolk, VA value them the way they value any income property: on net operating income, or NOI. It is the facility's rental income and other income, minus vacancy, bad debt and operating expenses, before any mortgage payments or capital improvements. Every serious offer for a self-storage facility is built on that number.

• Gross potential rent: every unit at its current rate
• Minus vacancy, concessions and delinquent accounts
• Plus ancillary income: tenant protection or insurance programs, admin fees, retail boxes and locks, truck rental, parking for boats and RVs
• Minus operating expenses
• Equals net operating income (NOI)

Occupancy: physical, economic and the unit mix

Physical occupancy counts the units rented; economic occupancy measures the rent actually collected against what the facility could earn. A buyer of a self-storage facility in Norfolk, VA also reads the unit mix: how many 5x5, 10x10 and 10x20 units, how many drive-up versus interior or climate-controlled units, and which sizes stay full and which sit empty.

In-place rates versus street rates

Street rates are what a new customer pays today; in-place rates are what existing customers pay. Long-term customers often sit below the street rate. A buyer looks at how far apart the two are, how recently rates were raised, the facility's discounting and promotions, and how comparable facilities nearby are priced, to judge how much income the facility could earn and how quickly.

Operating expenses

Buyers ask for the trailing twelve-month profit and loss statement, the property tax bill and the insurance declarations, and they budget for costs an owner-operator may not pay in cash, such as professional management, payroll and replacement reserves.

• Property taxes and insurance
• Payroll or on-site management
• Utilities, especially for climate-controlled space
• Repairs, maintenance and cleaning
• Software, credit-card fees, marketing and online listings
• Replacement reserves for doors, roofs and paving

Rental agreements, delinquencies and lien sales

Self-storage customers usually rent month to month under a rental agreement, so a buyer looks at the length of stay, the share of customers on autopay, and the delinquency report. Delinquent accounts are handled under the state's self-storage lien law, which sets the notice and sale process; a buyer will want to know how many accounts are in that process at closing.

Deferred maintenance and capital expenditures

The big capital items in a self-storage facility are roofs, roll-up doors, paving and drainage, gates and access control, security cameras and lighting, and the HVAC that serves climate-controlled buildings. Work that is already due is priced into any offer, because the buyer will fund it after closing. Selling a self-storage facility as-is means you don't pay for it first.

Cap rates, where real market evidence supports them

A capitalization rate is NOI divided by price: a facility with $180,000 of NOI that sells for $3,000,000 trades at a 6% cap rate. Cap rates differ by market, facility size, age, the share of climate-controlled space, competition and interest rates, so a cap rate only means something when recent comparable sales support it. We don't quote a cap rate for Norfolk, VA without that evidence. Your written offer shows the income, expenses and assumptions it rests on.

How Prominent evaluates a self-storage facility in Norfolk, VA

Prominent buys self-storage facilities in Norfolk, VA as they are, customers in place. We review the rent roll by unit size, occupancy and delinquencies, street and in-place rates, the trailing twelve months of income and expenses, ancillary income, the condition of the buildings and site, and comparable sales. You don't raise rates, fill units or repave first, and the written offer explains how each of those inputs shaped the price. For the tax side of selling business property, see IRS Topic 409, Capital gains and losses.

Start with the address. If your Norfolk, VA self-storage facility is a fit, you get a written cash offer with the amount and the terms spelled out, and no obligation to accept it. There are no fees or commissions, we pay the closing costs, and you choose the closing date.

Prominent Cash Offer buys Norfolk, VA self-storage facilities directly, with no listing. Read the full guide to selling a self-storage facility, see how we buy houses in Norfolk, VA, or compare self-storage facilities across Virginia. We buy self-storage facilities nationwide too. For state services, start at Virginia.gov.