There are 2 components to a management rights complex:

Managers unit and office area
Management Rights Business

The managers unit is normally located near or adjoining the office. The value of the managers unit is based on the location, size, type of complex, additional storage area and age. A premium might apply to the value of the unit, since it is the only unit in the complex that is permitted to conduct a management rights business from.

The value of the business is determined by the net operating profit by a multiple of between 3.5 – 6.5 times. The net operating profit is calculated by deducting the core operating expenses from the gross receipts for a specific period. The expenses exclude depreciation, borrowing costs, interest on loans and expenses of a personal nature including those of a business nature but not necessary to be incurred.
An example is below:

Net operating profit for the last 12 months = $100,000 x 4.85 = $485,000 (value of business)
Unit $350,000
Total $835,000

The multiplier is based on supply and demand. The multiplier has been increasing over the past 10 years.

The average multiplier over the past 12 months with a net operating profit of $150,000 and below is just under 5 times.
The average multiplier over the past 12 months with a net operating profit over $150,000 is around 5.2 times.

There are sales with multipliers in excess of 6 times, however these are larger income buildings.