Husband of 34 years to my college sweetheart, Janet Murphy (@janetmurphydesign on Instagram). Together we have 6 wonderful children from ages 15-31 and 5 grandchildren. I've been a licensed REALTOR since 2003 and broker since 2007. I also am a cost segregation specialist helping building owners and real estate investors maximize their tax deductions, save thousands on their income taxes and increase their cash flow. If you're a building owner you probably haven't done a study...let's connect. There is no obligation. We can run an estimate for you and really every building should be evaluated if the basis is over $150,000. I can work all over the country and not just here in the Upstate. We relocated to Greenville, SC for the lifestyle, lower cost of living, amazing amenities in the area and the growth opportunity for business and real estate. We absolutely love it here!
All opinions are expressly my own and do not represent either eXp Realty LLC, Cost Segregation Services, Inc. or any other company, organization or group that I might be affiliated with.
FILE- Gulls follow a commercial fishing boat as crewmen haul in their catch in the Gulf of Maine, in this Jan. 17, 2012 file photo. TExecutive branch agencies will likely have more difficulty regulating the environment, public health, workplace safety and other issues under a far-reaching decision by the Supreme Court. The court’s 6-3 ruling on Friday overturned a 1984 decision colloquially known as Chevron that has instructed lower courts to defer to federal agencies when laws passed by Congress are not crystal clear. (AP Photo/Robert F. Bukaty, File)
Dispite Amazon supposedly killing traditional retail as we know it, retail strip centers continue to perform very well for their owners. We study a lot of these kinds of buildings and they tend to do well for their owners in terms of accelerated depreciation.
This one happens to be in Five Forks – Simpsonville, SC. It sits on a terrific corner at Woodruff Road and Highway 14 in the highly sought after area called Five Forks. There had been an old building that was at this corner and was for sale for a long time. It got demolished to make way for this gorgeous new 3 tenant retail strip. The tenants are Summer Moon Coffee, Tazikis Mediterranean Cafe and Tek Replay.
I was in the building last week and all the tenant spaces. It’s beautiful and high quality. The Boardman Group was the General Contractor and design firm that built this building. It is located adjacent to Southside Christian School which has elementary through high school. It seems there’s a built-in customer base right there.
New warehouses are great for 179D Energy Efficiency Tax Deduction
179D Energy Efficiency Tax Deduction
There are many nuances and variables with this tax deduction for commercial building owners and it’s not quite that easy to say who and how one qualifies for this. The laws changed recently which do affect buildings placed initially into service in 2023 / 2024. It used to be owners could get up to $1.80/SF for a tax deduction but now it’s been revised upward to $5/SF. Here’s the official IRS web page for the 179D deduction.
It’s really designed for buildings with about 40,000 SF or more given the math between the cost of the study and the tax deduction. It might make sense at 30-35,000.
But let’s say you have a 100,000 SF building. It might qualify for up to $5/SF which would be a $500,000 tax deduction. The interesting thing is this deduction is not subject to the current bonus depreciation schedule so you get 100% of this tax deduction. The other thing that I think is very powerful is this deduction hits your depreciation schedule and reduces the 39 year class life property. Most of us are used to the 5 and 15 year class life deductions with cost segregation and the use of bonus depreciation. This hits the 39 year line…nothing hits the 39 year line unless it’s 179D or a partial asset disposition.
I was going through some recent sales and saw that EnerSys Gigafactory LLC just closed on 321 acres in the Upstate. I found this press release and I’m sure there are several other news storage out there regarding this. The press release says between the state and Greenville County, they got $200MM in incentives to come build here. They plan on a state of the art 500,000 square foot facility that will bring about 500 jobs. Here’s another article about the proposed factory.
South Carolina appears to be a key destination for many of these giant batter facilities as we’ve seen with other deals. The South Carolina Department of Commerce are excellent business deal makers and there are lots of excellent economic development groups in South Carolina that also help.
At a time when it’s incredibly challenging for owners of office space to keep their vacancy rates low, many owners are making improvements to their properties to continue to keep and attract new tenants.
A new ownership group purchased the office complex known as Park 37 in Greenville for $53,250,000 back in January of 2022. It’s a significant office park for Greenville and has 9 buildings. Recently they have completed some gorgeous improvements to Park 37 Building 300. DP3 Architects did the design and it looks amazing! Congrats to the ownership group, DP3 Architects and the tenants who get to benefit from this significant improvement to the building!
I have not made contact with the new owner yet but this would likely benefit from doing a partial asset dispostion on this property given the significant improvements that have been made.
Looking for models to help you make decisions on your multi-family investments? Be sure to check out Spencer Vickers on LinkedIn. He publishes a lot of tremendous content around real estate investment and particularly in the area of multi-family investing. He is working on a number of things and I believe will have some big announcements soon about a business or service he may be offering to the public.
Wonder how they get these big MRI machines into the hospitals? Check out this video where they are installing a new 16,000 pound MRI unit into a new tower at Torrance Memorial Medical Center in Torrance, CA.
I was searching to try to understand more about what goes into the walls to be able to accommodate such a device. They do talk about the non-magetic metals that are throughout the room for the outlet covers, screws, cabinet handles etc. It was also very interesting to see that interior walls were lined with copper which they said blocks other radio frequencies from outside the building.
Building Product with special tax status that few know of yet. Green Zip Tape is something every commercial developer should be considering to lower taxes, increase cash flow while being environmentally friendly.
For example…let’s take a $50MM project. They could see an additional $5MM move from 27.5 / 39 year class life to 5 year by using GZT. That’s nearly a $2MM income tax savings over 5 years. The tax benefits of building with GZT transfer to the new owner. This will be helpful in marketing the property. On top of that you’ll have those who are just thrilled about the sustainabilty / green building components of your building. The cost is a fraction of the benefit.
The IRS gives Green Zip Tape a special tax status because it helps eliminate sheetrock ending up in the land fills when owners need to renovate. The patented technology in the tape allow is to be removed easily from the sheetrock without causing a bunch of damage. The sheetrock panets can then be removed and reused so you end up with removable panels at a fraction of the cost. And you get the tax benefits! It’s genious!
Renderings by Johnston Design Group and NR Investments.
The city of Greenville’s Design Review Board has given the green light to new site plans for Gracie Plaza, which will be a transformative project for the City of Greenville and will set the tone for Greenville’s Gateway corridor.
The developer for this project is Miami’s NR Investments which is a major player in south Florida so it exciting to see them bring their work here to Greenville. Johnston Design Group out of Greenville is the architect for this remarkable building and project.
This building while being the tallest in the city, will be really the first thing one sees I believe when they enter the city from 385. Right now this part of the city is very uninspiring. Bon Secours Wellness Area in located right there and there are a number of other smaller, generally older buildings. There’s a lot of traffic that passes through this area.
The Upstate Business Journal has been doing a great job of covering the various iterations of Gracie Plaza. Be sure to check out there stories.
Some key points about Gracie Plaza:
Two towers – 24 and 29 floors
342 apartments
363 space parking garage
12,000 SF of commercial space for restaurants and creative studio spaces
The building will be located on the Greenville Memorial Auditorium site.
There is still more work to do with the permitting process before NR Investments fully has the green light to move forward but it’s looking good for them and for the City of Greenville.
Had a couple of conversations this past week as well as reviewed some depreciation schedules and more often than you would think, we see schedules that have the Airbnb or VRBO (STR) listed as a 27.5 year asset. It’s not. It’s considered more like commercial and gets treated as such. So, short-term rentals like Airbnbs and VRBOs are 39 year assets. Keep that in mind as you are forecasting your depreciation.
Should you study your short-term rental? Well, that depends. Are you going to hold it for at least a few more years? Is it profitable? If it’s not profitable, are you managing the property so that you might be able to utilize the depreciation to offset your other income? Be sure to discuss this with your tax advisor. We can always run the numbers for you but then you need to consult with your own advisors to see if it makes sense to do a study. No need for you to spend $2,500 – $5,500 or so to get a study done only to find out you really can’t use the depreciation. That said, we study a lot of Airbnbs and VRBOs. The cost is not a lot of money for the tax benefits you receive. Many owners see a 10x return on their investment in the study.
Reach out to me if you’d like to discuss. Feel free to also check out the other site I’m building over at Cost Seg Estimate.
