Cost Seg Building

A Blog About Tax Savings for Building Owners

Month: February 2025 (Page 2 of 2)

Cost Segregation for Industrial Outdoor Storage (IOS) Properties

February 24, 2025 / / 0 Comments
Antioch IOS – Piedmont, SC – Photo Credit: Lyons Industrial

Industrial Outdoor Storage has seen a sharp rise in demand over the past few years and people look for places to store their trucks and trailers. You might not think these are good properties for cost segregation, but you would be wrong. These are phenomenal asset classes when it comes to taking advantage of accelerated depreciation generated by cost segregation.

Most IOS sites are nearly 100% land improvements. There’s site work, gravel, maybe asphalt and concrete. They have fences, security gates, lighting and some have small out buildings as well as utilities. Sometimes we’ll see flex buildings or truck terminals that also have large storage areas for trucks and trailers.

If you’re building these from scratch with all the cost detail, your tax advisor might feel comfortable just allocating the various line items and components to their proper class lives so you can accelerated depreciation. But if they are not comfortable with that or it you might want a 3rd party expert like our firm to do the study for a nominal fee, you’ll not only likely rest easier having an engineering-based cost segregation study completed becuase of the size of the deduction you’ll get, but you’ll then maximize your deduction and be assured everything is classified properly.

Let’s say you spent $1,000,000 on building your IOS – not including the land acquisition. Let’s say $950,000 ends up being reclassified. If you built this and put it into service in 2024, you can take 60% bonus depreciation. That would be an increased accumulated depreciation deduction of $570,000. That’s a a MASSIVE deduction. If you would sleep better at night knowing a firm like ours did the study, then just pay the small fee to get it done.

If you have purchased an existing IOS – i.e. you did not build it from scratch but rather have bought it after the fact – then you should look at getting a cost segregation study done. You will get a lot of benefit by doing that. We study them often and the results are extraordinary. Reach out to me if you’d like a quote. I work all over the U.S. in all 50 states.

John Murphy CSSI

Webinar: Cost Segregation Look-back Studies and Applying 3115 Form for Bonus Depreciation

February 19, 2025 / / 0 Comments

CSSI will be hosting these webinars once per month in 2025 so if you can’t make this, there will be others. Just let me know if you’d like to be on my mailing list. Also, let me know if you’d like a copy of the presentation slides and video recording. While these tend to be geared toward CPAs as this one will be a continuing education course for CPAs, CRE brokers and commercial property investors are welcome to attend if you’d like to learn more. There is now cost.

CSSI Webinar: Applying 100% Bonus Depreciation Retroactively for Commercial Property and Short-term Rentals (Airbnbs, VRBOs).

John Murphy CSSI

Mobile Home Parks, RV Parks and Campgrounds – Outdoor Hospitality as an Asset Class

February 19, 2025 / / 0 Comments

I study a lot of mobile home and RV parks across the country as they produce phenomenal results when it comes to cost segregation. There are few asset classes that perform better. But these things are also massive cash generators and while there are some people starting to accumulated them, it’s a disjointed, fragmented and undercapitalized asset class that is ripe for disruption, consolidation and massive improvements. Many parks that I have seen have been operated by the same guy for the past 20-30 years and usually see rents substantially under market. New owners are coming in are often making improvements and boosting cash flow – i.e. better returns.

I’d like to share a LinkedIn post from Dylan Kidd whom I’ve worked with before on a number of studies. He is a specialist in RV Parks and Campgrounds and believes in it so much that he left a well estiblished and well regarded firm here in Greenville, SC to launch his own brokerage called Campfire Capital Group that will focus on Outdoor Hospitality in the southeast U.S. I thought his post on LinkedIn nailed so many great points about outdoor hospitality, RV parks and campgrounds.

Craig Gaulden Davis Architecture Merges with PBK

February 18, 2025 / / 0 Comments
Renfrow Industrial, Spartanburg, SC – Craig Gaulden Davis Architecture

Consolidation continues in the world of architecture as South Carolina-based Craig Gaulden Davis Architecture merges with Maryland-based PBK. The new firm is called Craig Gaulden Davis | PBK.

I’m not familiar with PBK, but Craig Gaulden Davis Architects play a prominent role in design and architecture on big projects in South Carolina. Here’s some of their portfolio.

PBK has this story posted on their site about the partnership or merger.

No doubt this newly merged firm is only going to have a bigger impact on large projects across the states they serve.

Don’t Leave Money in Your Building: How Cost Segregation Can Unlock Hidden Tax Savings

February 12, 2025 / / 0 Comments

Just a reminder that bonus depreciation is still available on buildings. I do expect we’ll see 100% come back soon for 2025. If you put a building into service back in late 2017 through the end of 2022, you can still grab 100% bonus depreciation on assets with class lives 20 years or less. No need to amend your tax return. You can take it on your current tax return. We can draft the required 3115 Change of Accounting form for you. Easy peasy.

Let’s say you are self renting – i.e. you are running a business out of a building you own…if you grouped that entity with the real estate in the first year you put the building into service, you can go back and grab that remaining bonus depreciation to help reduce your operating income for your business. (There may be some nuances so check with your tax advisor).

And for those who say cost segregation might not be worth it if it’s only 40%, I just completed one where the owner will get $450,000 in a depreciation expense because he did cost segregation vs. $60,000 which is what straight line depreciation was going to provide. But hey, it’s your money. If you want to leave $10k, $20k, $50k, $100k of tax savings just sitting in your building and not your bank account, that is your perogative. I’m just the messenger here letting you know of an amazing opportunity many owners still are not taking advantage of.

Don’t let your tax advisor tell you your building is not worth studying unless you have an estimate in your hands that you and your tax advisor can discuss. Get the facts.

If you’re unsure whether your property qualifies, let’s run the numbers. Message me, and I’ll get something back to you in a day or two so you can at least know if you are leaving money in your building.

John Murphy CSSI

Sale-Leasebacks & Cost Segregation: A Smart Move for Owners & Investors

February 10, 2025 / / 0 Comments
Sales Leaseback and cost segregation

Sale-leasebacks have surged in popularity over the past few years, offering building owners a way to maximize their sale price while securing a long-term lease that enhances the property’s value. A well-structured sale-leaseback often results in a desirable cap rate, making the transaction attractive to investors.

But there’s another major financial advantage many overlook—cost segregation.

For buildings involved in a sale-leaseback, a cost segregation study is a must. These are often income-producing properties with long-term owners (typically 3+ years), making them ideal candidates for accelerated depreciation. Instead of keeping the entire asset on a 39-year depreciation schedule, 20-30% (or more) of the building can often be reclassified into shorter depreciation lives, leading to:

✅ Increased cash flow
✅ Higher investment returns
✅ Lower tax liability (even if it’s just a deferral, the time value of money matters!)

In short, cost segregation is a no-brainer for sale-leaseback transactions. Running the numbers costs nothing—and it gives property owners and investors a valuable opportunity to discuss tax-saving strategies with their CPA.

CRE brokers, take note: Getting cost segregation estimates for your clients not only adds tremendous value but also positions you as a well-prepared, knowledgeable advisor. In a competitive market, small insights like these can set you apart.

Want to see what cost segregation can do for your next sale-leaseback deal? Let’s run the numbers—at no cost to you.

Save Money, Save the Planet: How Green Zip Tape Transforms Drywall

February 5, 2025 /

Make Drywall Great Again!

Drywall is a phenomenal creation but we end up with WAY too much of it in landfills. It’s a problem. By using Green Zip Tape you can help your community by keeping drywall out of your local land fills. It makes for a FANTASTIC pitch by the way to city and county councils as you are seeking your approvals. There are also fantastic tax benefits to be had.

If you are building a hotel, multi-family, office or medical facility and you are not using Green Zip Tape, you are missing out on many opportunities to improve your project from all facets…construction, environmental, tax, cash flow and value.

$10MM+ construction projects

Let’s talk about it. Give me a call anywhere in the U.S.

John Murphy CSSI

Trinity Partners Greenville Commercial Real Estate Outlook 2025 (video)

February 5, 2025 /

Take a listen to Trinity Partners Greenville Managing Broker, Partner, Edward Wilson and Senior Broker, Grayson Burgess and they discuss the market outlook for commercial real estate in South Carolina. Edward and Grayson work across the state and are based in Greenville, SC. I’ve worked with both of these gentlemen and they are tremendous resources for commercial real estate in the Upstate of South Carolina.

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