Family Inherited Large Property in LA - How much is it worth?

[Andrew Erickson]

My grandmother bought a minority share in a commercial property nearly 50 years ago. She passed on her shares to my mother and her siblings about 20 years ago. They together own 25% of a large commercial building in Commerce City, Los Angeles, CA. It has been paying them together $50k a year (take home) for the last decade. 

They want to sell now! What do you think it's worth? 

Here is my reasoning. On investments like this, you should expect a 6% to 10% return. That return will come in 2 parts: equity and income. Equity is just the value of the building/land. Income is of course what you get paid from rent. Let's assume that the equity will grow by 3% each year. That means 3% to 7% will come from income.
Now we do a little algebra ;-) 

Min: Income = 7% of Estate Value = 7% * Estate Value
Max: Income = 3% of Estate Value = 3% * Estate Value
Min: Value = Income / 7% = $12k / .07 = $171,400
Max: Value = Income / 3% = $12k / .03 = $400,000

So I would guess as much as $400 and as little as $170k. 

However, if you use an equity growth rate of 4.5% (which is the average return in LA over the last 50 years), the numbers change a lot!
Max: Value = Income / 1.5% = $12k / .015 = $800,000
So it could be as high as $800k for each share!

Definitely need a good real estate agent to help us, right?