Add fourth bedroom or keep storage space?

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We have a 3/2 twinhome with a single bedroom and a large storage room in the basement. We have plans to add a small kitchenette (hookups close, wasted space + kept old appliances from kitchen remod) and turn the storage room into a finished office/closet or storage space. 

If we eliminate the storage space, we could open up the entire wall for cabinets with counter space next to the washer and dryer, and the remainder of the space would be living room. 

However, if we were to relocate and double the size of storage room on the opposite end, it would be just barely large enough (80 sqft) to be considered a legal bedroom. 

Would the added bedroom increase our sale price, or would the lack of storage space decrease the potential desirability?

Top photo is kitchenette area and storage, bottom is possible bedroom. 

Fun fact: The original carpet (top) looks way better then it smelled. 

Additional Q: keep the brick wall original, paint, or remove?

Thanks in advance!