Appraisals on Portable Self Storage Units that are tied down per City Ordinance

[Rlong]

Well, I'll be the outlier! I did one of these a few years back. They are tied down some to concrete and some with deep earth anchors, all I deemed "permanently affixed", and it was accepted by the initial lender (this was a re development of an older industrial building where they put indoor climate-controlled units in the building and "affixed" units outside. Most manufactured homes with FNMA financing are simply "tied down" with cables or rebar... if people want to "run-away" with them they simply need to get readily available axles and bolt on tongues that every unit ships with.

I know this one has been since purchased and refinanced, so at least several banks have accepted it. You should read more in the Self-Storage professional association publications. There might be some support there (I know there was a big article about this being a trend when I did these, that I probably have SOMEWHERE. In the end your client is certainly allowed their opinion, and determination, it’s simply not an empirically right or wrong situation.

I currently rent one.... my stuff and unit havn't disapeared YET!

Bob in CO

 

[Russ Kitzberger]

Personal property, but it doesn't mean that you cannot value the personal property if you are competent and they want the value. You are on the right track with looking at it from an income perspective.

Be careful with your economic life and capitalization rate determinations for that component. You may account for replacing some of the units every X years, which would allow the operation to continue indefinitely.

Agree with NP. Assuming your lender and their appraiser have looked at this from a legal real estate vs trade fixture perspective per your location. If not, get an attorney opinion.

Alternatively you can adjust loan to include furniture fixtures and equipment or going concern (and get different appraisal).

Or perhaps change manner of affixation to become real property.