CSSI has completed studies for all locations of this retail auto service center located predominately in the southwestern US. Each location was individually inspected and each study was approached as a unique building. This assured an accurate segregation of the variable costs inherent with each location and building conditions. While each location was different, this example reflects the typical results found with this type of project.
The auto service center received $318,024 in reclassified assets and $127,846 in tax savings
CSSI recently completed cost segregation studies for a firm based in southern California. The private equity firm has a large portfolio of properties across North America and Europe. They had recently acquired a portfolio that consisted of nearly 100 industrial offices and retail properties located across the US. The project included a distinguished property of 520,000 sq. ft. The entire study was completed in just 30 days.
The project was completed on time to meet the 1st quarter tax deadline rush; on top of CSSI’s normal business volume during this busy period.
The Senior Partner of the firm said, “I am an extremely cost conscious and demanding investor. No other firm could have met the level of detail I require and complete such a project within our time frame. I am very happy with CSSI’s performance and the commitment of our representative to see this project completed successfully within an impossible time frame.”
After struggling without a budget, this client who wanted to start a green energy project employed CSSI and requested a study on their 109,000 sq. ft. office building. CSSI generated $582,000, funded their project, reduced the payback period to two years and gave the owners $222,000 in cash. The company was able to improve their office with comprehensive lighting, a chilled water system controls upgrade, an air system control upgrade and install window film. The company expects to receive an energy cost savings of $175,000 per year. CSSI, with their comprehensive study, was able to get the company the money and savings they needed in order to complete their project.
This client is a privately held, vertically integrated real estate developer, owner, investor and investment manager. The developer’s vast real estate portfolio includes hotels, mixed use projects, development projects, master planned communities, office, industrial buildings, retail shopping centers, senior housing assets, single tenant leases, multifamily for rent and sale projects and single-family communities throughout the United States, Mexico and India.
In the 2013 tax year, CSSI performed an engineering-based cost segregation study that produced $36 million in asset reclassification for the developer on a select portfolio of properties. The ROI for the over $7 million after-tax savings was 35:1.
The firm elected to hire CSSI for studies on an additional 60 properties in 2014.
The property in this case study was purchased as a new office and warehouse for a small regional roofing contractor. The property included both an interior material storage area, as well as a gravel fenced exterior area for storing vehicles and other materials used by the company. CSSI’s thorough on-site inspection identified not only the normal cost segregation items, such as the fenced yard and gravel surfacing, but also special site preparation that included water retention and mitigation contours. This allowed the owner to receive additional 15 year asset classifications for a total of $216,557 in reclassified assets resulting in a tax savings of over $87,000.The property in this case study was purchased as a new office and warehouse for a small regional roofing contractor. The property included both an interior material storage area, as well as a gravel fenced exterior area for storing vehicles and other materials used by the company. CSSI’s thorough on-site inspection identified not only the normal cost segregation items, such as the fenced yard and gravel surfacing, but also special site preparation that included water retention and mitigation contours. This allowed the owner to receive additional 15 year asset classifications for a total of $216,557 in reclassified assets resulting in a tax savings of over $87,000.
The owner of the restaurant in question knew that converting his building from a previous restaurant to one with an updated concept would generate excellent results with a cost segregation study from CSSI. What he did not expect was to receive an extra $119,351 deduction for the assets he tore out and threw away.
This is a common situation for anyone who renovates a currently owned property. The fact remains that for virtually anyone who has renovated their property since 1987; it is highly likely that they have unknowingly left money on the table in the form of deductions.
To make matters worse, detailed reading of the new Tangible Property Regulations (aka Repair and Maintenance Regulations) indicates that deductions for property once removed may be denied in the future.
After seeing the better than estimated results of their 200,000 sq. ft. shopping center in Colorado, the real estate developers engaged CSSI for their most recent acquisition, another shopping center, this one in Arizona.
The thoroughness of CSSI’s engineering-based process frequently delivers better than estimated results because of its “under promise over deliver” ethic.
Regardless of property type, CSSI’s team of professionals digs for every nickel the owner is entitled to receive.
This unique facility is largely underground. As you might expect, a wine storage facility is what would normally be described as a “Bare-Bones” building. Never-the-less, CSSI’s detail oriented engineering-based cost segregation study was able to identify $248,801 in 5, 7 or 15 year assets that otherwise would have been depreciated over 39 years. Dedication to detail led to $100,018 in tax savings for the client.
Industrial property covers a wide range of different buildings from self-storage facilities to flex space and large distribution warehouses. While at first glance, the average Commercial Real Estate (CRE) owner might think there is little that can be segregated into the 5, 7 and 15 years shorter term asset classes. Closer examination reveals this not the case.
While there is a high degree of variation in how much office space may or may not be in a particular facility, roll-up doors, dock leveling devices and structures, protective bollards, paving, fencing and site preparation are just a small example of the numerous items that qualify for shorter definitions.
“The bottom line speaks for itself… CSSI saved us over $500,000 in cash. In these economic times no one in business can afford to let that kind of money slip way.”
– J.P. – CEO
The best way to determine the potential benefits from an engineering-based cost segregation study is to get a complimentary Property / Asset Valuation Analysis today. Knowing the specifics on your property can be had at no cost, no risk and without obligation. A few simple questions and you’ll have your results in 48 hours.