Cost Seg Building

A Blog About Tax Savings for Building Owners

Category: Office Buildings

Minneapolis Office Buildings See Drop in Assessed Value for Property Taxes

March 25, 2025 / / 0 Comments
Wells Fargo Center, Minneapolis, MN / Photo Credit: Bring Me the News

Central Business Districts continue to struggle to make a come back particularly in blue cities and states post covid. We’ve seen massive discounts in building values when sales have actually happened. Many office towers have seen 60-80% discounts from their last sales price.

Minneapolis continues to struggle and the taxing authorities are recognizing that the values aren’t what they used to be. That said, they have only taken a slight dip in terms of the assessed values placed on the properties for tax purposes.

According to the Minneapolis / St. Paul Business Journal, below are downtown Minneapolis’ top five largest office towers and the change in their valuations from assessment year 2024 to 2025, according to recently updated Hennepin County records.

  • Capella Tower, 225 S. Sixth St.: 2024 value was $147.7 million; 2025 value is $131.6 million, representing an 11% drop
  • IDS Center, 80 S. Eighth St.: 2024 value was $167.5 million; 2025 value is $135 million, a 19% drop
  • Wells Fargo Center, 90 S. Seventh St.: 2024 value was $173.6 million; 2025 value is $106.1 million, a 39% drop
  • U.S. Bank Plaza, 200 S. Sixth St.: 2024 value was $156.1 million; 2025 value is $111.1 million, a 29% drop
  • City Center, 33 S. Sixth St.: 2024 value was $139 million; 2025 value is $116.7 million, a 16% drop

The Wells Fargo Center sold at a substantial discount last year for $85MM. This was about 70% lower than it’s peak value in 2019. It would seem the tax assessors may still have a way to go before they get to “market” value.

Pintail and Dunean Capital Have Big Plans for Fontaine Business Park, Columbia, SC

November 3, 2024 /
200 Arbor Lake Dr, Columbia, SC - Fontaine Business Park
Photo Credit: John Murphy, Cost Seg Building – Fontaine Business Park, Columbia, SC

Greenville-based Pintail and Dunean Capital Management are the new owners of the 25 acre Fontaine Business Park in Columbia. SC. It’s a massive property with 4 office buildings and about 250,000 SF.

I had the opportunity to walk the property last week as I’ve been engaged to do the cost segregation study for the new owners. It took us about 4 hours and 12,000 steps but we got through the whole property. I had a chance to walk the property with the new property managers, Reedy Property Management, as well as one of the representatives from Dunean Capital Management.

The new owners plan to make a number of investments and of course bring on new tenants. One of the big names that is public is they have inked a deal to create a new child care for Prisma Health’s Bright Horizons. It will be an child care exclusively for local Prisma employees. I’m always amazed walking commercial buildings to see how they currently exist and then to hear what the plans are for the renovations. The Prisma Health Bright Horizon’s day care is going to be in a great spot at this complex.

There’s a lot of creative real estate pros, managers, developers and investors who are now running Fontaine Business Center. There’s a lot of space here for these guys to get very creative. I have no doubt they will turn this challenged property into a thriving business park in Columbia, SC.

Mungo Homes Opens $10 Million Headquarters

November 3, 2024 /
Mungo Homes New Office: Irmo, SC – Photo by John Murphy, Cost Seg Building

I happened to see this in the news this week and I since I was going to be in Columbia doing a site visit for the Fontaine Office Park that I am studying, I thought I’d swing by and check out the new Mungo Homes office building. I was running late so I only got some shots as the sun had gone down. The building is gorgeous and is right on the frontage road that is easily visible from I-26. Not only will this be great space for Mungo Homes employees and customers, but it’s 24/7/365 marketing as the building is lit perfectly!

Congrats to Mungo Homes’ continued success and growth. According to the article published in GSA Business Report, they are looking to move into the Charlotte market as well. Mungo Homes has a significant presence in South Carolina.

Below are a few of the images I took the other night.

Park 37 Building 300 Greenville SC Renovation by DP3 Architects

May 31, 2024 /
Photo: DP3 Architects – Park 37 Building 300

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.

Dentists Can Save $100,000 On Taxes By Using Cost Segregation

November 8, 2022 /
Photo Credit: John Murphy

Dental buildings have really come a long way. We are seeing more and more of them with beautiful design and finishing. Many now cost between $1.5 – $2.0 million. That’s a big expense for anyone and especially for dentists who may well be continuing to pay for dental school loans.

If the ownership of the operating business and the LLC that owns the dental building are the same, the dentist can group these entities the first year they put the building into service. That allows the operating LLC to take advantage of the depreciation generated by the real estate LLC. The tax savings can be significant.

Many of these buildings will see 20-30% of the building cost or basis able to be depreciated in the first year. For buildings placed into service starting in 2023, the bonus depreciation drops from 100% to 80% so please note that.

Recently we saved this dentist well over $100,000 on their income taxes when we did an engineering-based cost segregation study for them.

Cost Segregation for Spartanburg Office Building Saves Owner $89,000 in Income Taxes

September 13, 2022 /
John Murphy – Cost Segregation – Spartanburg Office Building

It’s always a good day when I can deliver our engineering-based cost segregation study to a building owner to helpl him/her save money on their taxes. Remember, what we do is reclassify a building from 39 year straight line depreciation in to 5, 15 and 39 year class lives. This allows the owner to take a bigger depreciation expense earlier in the life of his/her ownership of the building. That translates in to paying lower income taxes…and in some cases, it eliminates your income tax liability for a while.

This was a gorgeous older building in Spartanburg. It goes by the name Warrior Duck. It’s a 3 floor office building. As you can see by the image above, we saved this owner nearly $90,000 in income taxes.

As with all of my articles, I am not given tax advise. Everyone’s tax situation is different and each building performs differently. Please consult with your own tax counsel when considering cost segregation.

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