Self-Storage Facilities

This facility was purchased for $1,200,000. Located on a 1.42 acre tract, an analysis indicated that 20%, or $240,000, should be allocated to the value of the land. The remaining $960,000 was allocated to the improvement basis. The facility included 170 self-storage units of various sizes situated within four metal (Class S) buildings. Our site visit to the property revealed that the unit divider walls were removeable and reusable, thus qualifying for accelerated depreciation. We also identified electronic gate operators, security cameras and controller system, chain link security fencing, asphalt paving, a storm water management system, and various signage, all of which we were able to segregate into accelerated depreciation classes. As a result of the study the $960,000 improvement/depreciable basis was segregated into the following depreciation classes:

5- year: $171,840
7- year: $9,120
15- year: $97,056
39- year: $681,984
TOTAL: $960,000

With 100% Bonus Depreciation the net first year depreciation was $294,799, with a first year tax savings of $109,076 and a payback ratio of 34:1.