Cost Segregation case studies provide actual examples of real-life projects completed by Segregation Holding LLC. These Studies benefited owners of commercial buildings, leasehold improvements, office condos, and residential rental property by reallocating assets from long-term depreciation (39.5 & 27.5 years) to short-term depreciation periods of 5-, 7- and/or 15-years. The results were significant reductions in federal and state income taxes and in many instances deferral for 2 years or longer in paying any federal income taxes. Our clients’ confidentiality is of utmost importance to us and we have been given approval to share this information. It is our hope that this information is found to be beneficial.
The Multi-family category includes condominiums, apartments, hotels, and any residential-type facility that houses people either temporarily or for an extended time up to and including for life (e.g. single family house, duplex, triplex, quad-plex, nursing home, extended stay facility, etc.).
Case Study 1: Apartment owner saved over $2 million in federal income taxes!
The facility in this Study consisted of 44 two-story apartment buildings with a total of 493 units of one-, two-, and three-bedroom apartments. The property also included a leasing office, maintenance shop, and fitness center. The property's footprint was approximately 175,569 square feet with a total gross area of approximately 526,707 square feet on a 25.36 acre site.
Case Study 2: Hotel owner saved almost $1 million in federal and state income taxes with accelerated depreciation on over $4 million in assets!
The pre-engagement estimate for this luxury hotel with 224 guest suites, a full service restaurant, lounge/bar area, heated indoor and outdoor pools, multiple function rooms and a guest parking area showed a potential reallocation of $4,098,958. The Cost Segregation Study reallocated an actual $4,377,888 of the assets to shorter recovery periods.
Case Study 3: Owner of apartment/retail space pocketed $375,903 in first-year income tax savings!
The mixed-use facility consists of a 5-story building with the basement housing office space, the street level housing retail space, and the upper 3 floors housing a total of 12 apartments. The property has a footprint of approximately 9,700 sq.ft. with a total gross area of approximately 12,600 sq.ft., and it occupies a .22 acre site.
The office building category includes commercial structures designed for a single occupant or for multiple. Designs can vary wildly but typically contain spaces mainly designed to be used for offices that would contain various forms of furniture and business equipment.
Whether designed and built for a single tenant or multiple, each company will typically have a reception area, one or several meeting rooms, singular or open-plan offices, as well as bathroom facilities. Many office buildings also have kitchen facilities and a staff room.
Case Study 1: Office building owner saved $425,000 in federal income taxes!
The property in this Study was a 4-story office building completed in October 2002. The 98,800 square-foot building sits on 7.2 acres.
The Medical/Dental Buildings and Complexes category includes offices owned or leased, whether a free-standing building, a dental office condo or tenant/leasehold improvements. These can be for medical doctors of all stripes, dentists, orthodontists, periodontists, oral & maxillo-facial surgeons, and more.
Case Study 1: Dentist leasehold tenant saved over $102,000 in federal income taxes!
SHL was engaged by The Smile Center to conduct a Cost Segregation Study of their qualified leasehold improvements (also known as, "QLIs" or "Tenant Build-out"). The QLIs consisted of 4,890 square feet of dental operatories, lab, and office space.
Case Study 2: Dental office building owner saved over $131,000 in federal income taxes!
This kid-friendly dental office consists of 4,700 square feet of dental procedure, recovery, and office space. SHL exceeded the benchmark savings by over $150,000.
Case Study 3: Dental/medical property owner saved over $10,000 in first year tax payments and realized over $154,000 in first-year Net Present Value!
This Class A Office dental/medical center is an innovative, 3-story facility, constructed and placed into service in October 2007 with a total depreciable cost basis of $2.3 million. The building consists of 9,800 square feet of dental procedure, recovery, and office space.
Case Study 4: Dental office owner retained $132,633 in first year income tax benefits!
This kid-friendly and family-friendly dentist office was constructed and placed into service in October. The dental buildings consist of 6,320 square feet of dental operatories, separate waiting room and game room, laboratory, and office space. The building also contains a 1,244 square foot separate office space that is leased to a builder.
Case Study 5: Hospital saved $2,390,464 in taxes!
This full-service hospital facility consists of 224 private rooms, 62 semi-private rooms, and an expandable ER currently holding 9 urgent-care rooms, multiple operating rooms, imaging/radiology, a full laboratory, and physician’s office wing.
Case Study 6: Nursing home facility realizes over $350,00 in savings in the current tax year!
This two-story health care facility consists of 57,084 sq. ft. and features 40 oxygen-equipped patient rooms.
Case Study 7: Rescheduling 33% of assets saved owner of veterinary facility $98,025 in savings in the current tax year!
This 14,000 square foot veterinary facility sits on one acre with a depreciable cost basis of $1. 212 million.
The Retail category includes individual retail establishments, such as a gas station, a music store, a computer store, etc. and retail centers, such as malls, strip mall centers, and areas of concentrated retail establishments. A retail center can be one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from store to store, along with a parking area. In the case of malls, all shops are under one roof and may involve an attached parking garage. All retail centers include a parking lot as required by local codes and zoning, exterior lighting, landscaping, signage, and marked entrance(s)/exit(s) from the site.
Case Study 1: Retail facility property owner saved $361,205 in first year tax payments!
This retail strip center was constructed and placed into service in July 2008. The Cost Segregation Study examined the interior build-out and site improvementswith a total depreciable cost basis of $4.49 million. The retail strip consists of 83,277 square feet of retail space.
Case Study 2: Strip center property owner saved $162,731 in first year tax payments and realized over $248,945 in 10-year Net Present Value tax savings.
This strip center was built for 100% restaurant occupancy. It consists of 7,555 sq. ft. of retail restaurant space on 1.1 acres of land.
Case Study 3: BMW dealership owner saved $1,129,469 in current year tax payments and realized over $673,892 in current Net Present Value tax deferral.
The BMW sales and service facility, which includes retail showroom and office space, the parts and service department and an adjacent body shop, had a depreciable cost basis of $12.8 million.
Case Study 4: Oil Change business owner pocketed $28,958 in first year income tax savings.
Kwik Kar Lube & Tune is a facility that consists of a 4 double-sized bay building with reception and office space and a partial basement housing the under-carriage work area plus bin and tank storage for oil and other petro-chemicals. The building has a footprint of approximately 4,700 sq.ft. on a 1.12 acre site.
Case Study 5: Warehouse owner saved $34,854 in current year tax payments with a projected savings of $100,632 in Net Present Value over the next 10 years.
The warehouse is a single story bay-shipping and cold storage facility, occupying 172,850 square feet, sitting on 41.5 acres. It had a depreciable cost basis of $3.897 million.
Case Study 6: Mini-storage owner saved $385,011 in 10-year Net Present Value.
The three steel-framed masonry buildings (a 4-story and two 1-story buildings) that sit on 2.58 acres have a cost depreciation basis of $3,436,396.
The Restaurants category includes any business that prepares and serves food and drink to customers in freestanding buildings, those in strip mall centers, and malls. Meals are generally served and eaten on premises, but many restaurants also offer take-out and food delivery services.
Case Study 1: This restaurant chain owner’s tax savings was projected to be $306,770 in NPV savings over the next 10 years with $322,051 saved in first year tax payments.
SHL performed the Study on 5 quick-serve restaurant facilities. Each facility consists of a single story with an average building footprint of approximately 3,060 square feet.
Case Study 2: SHL Study produced almost twice the estimated benefit, saving the restaurant owner $246,709 in first year tax payments and realizing over $203,095 in 10-year Net Present Value tax savings.
The new owners of the Pineapple Grill seafood restaurant engaged SHL to do a Cost Segregation Study of its restaurant (8,943 sq. ft. building on .62 acres).
This category is for commercial buildings that don't fit our other categories.
Case Study 1: Funeral Home
Our study resulted in a total of $179,633 that qualified as 3- and 9-year property. Furthermore, we reallocated the entire base building asset from 39 year property to 22 year property because the funeral home is located on Indian ReservationTerritory qualifying for special tax treatment. As a result, the property owner saved over 50% more than originally estimated for the current tax year.