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.
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.
I happen to have been driving by this one regularly as I saw the parcel being developed along Butler Road in Mauldin / Greenville area. So it was nice to get the call from one of the brokers involved in selling the building to see if I could run some numbers for the new owner for cost segregation study.
These buildings are very nice. I enjoy working with brand new buildings – who doesn’t, right?
This one is just getting underway so I don’t have any ballpark results to share but I do expect that it will perform quite well. Medical offices generally do very well with studies. There is often lots of specialty plumbing, electrical, lighting etc. that get identified as 5 year class life property. Whereas most “offices” seem to produce maybe 8-12% for 5 year class life property, most of the medical offices I’ve been working on are seeing 18-20% for the 5 year. 15 year will do fine of course as there is a decent parking lot that surrounds this building.
Image Credit: Franklin Real Estate Development and the Upstate Business Journal
Franklin Real Estate Development has just opened these gorgeous newly renovated executive offices in downtown Greenville. Developer Kurt Wallenborn has done an outstanding job it appears on the renovation and restoration of this historic property. Upstate Business Journal has a story about the renovation.
Check out the office spaces offered at The Franklin.
Renderings by Johnston Design Group and SeamonWhiteside – Upstate Business Journal
The area in and around Bon Secours Wellness Arena has been lacking for years. Now there are a couple of projects that are in the works that will transform the area into an entertainment destination and will be a great complement to Bon Secours.
Miami-based NR Investments looked at the difficult to development triangle location of the former Greenville Memorial Auditorium site. This is not an easy project. What they are proposing looks terrific and I believe will be a great addition to Greenville, SC and will help revitalize this area.
The project has not been fully approved yet. The Design Review Board has asked for a few changes and pushed this out to the June timeframe. It seems like this will get approved once those accommodations have been made.
Below is a short video from the NR Investments partner discussing the site.
Recently we completed a cost segregation study for the owner of this retail strip center. I thought it might be helpful for you to see the kinds of results with this kind of asset. (Please note that every building is different and will see a different result…some will perform better than others depending on items like finishings and land improvements like parking lots and landscaping). The owner acquired the building in April 2022. For cost segregation, we deduct the value of the land to come up with the basis or the cost of the building. The basis was $1,125,000. The owner had also spent $125,000 on tenant improvements (TI) which were all interior improvements. Because he had purchased the building in April 2022, he would have had a depreciation expense of $18,750. That is straight line depreciation at 39 years. He also could have taken the $125,000 as a depreciation expense without our help as those tenant improvements are considered Qualified Improvement Property (QIP) which has a 15 year class life. Remember in 2022, we had 100% bonus depreciation for any class life under 20 years so the TI’s could be take at 100% depreciation expense. So he could have potentially had a total depreciation expense in 2022 of $143,750. But he ended up with a significantly larger depreciation expense since he did a cost segregation study. The results were as follows:
Basis: $1,125,000
5 Year: $62,247.71 / 5.5%
15 Year: $124,021.77 / 11.0%
39 Year: $938,730.52 / 83.5%
In 2022, any class life under 20 years can be taken as 100% bonus depreciation meaning you can depreciate the entire asset in year one rather than waiting 5 or 15 years. (Starting in 2023, bonus depreciation goes to 80% and then drops 20% each of the following years until it’s zeroed out in 2027 unless Congress changes the law). In this owner’s case, he was able to accelerate or fully depreciate $186,269.48 in year one because of the cost segregation. That combined with the QIP provides a depreciation expense of $311,555.14 in year one. At a 32% tax rate this would equate to a potential tax savings of $100,000. A study like this generally costs less than $5,500-$6,000. It takes 6-8 weeks to complete and the owner and his/her CPA get a complete breakdown in an easy to use format to apply to the owner’ taxes.
Below is the cost detail on this retail strip center.
The Upstate of South Carolina continues to be a top area in the U.S. for site selection for companies not only in the U.S. but around the world. Greenville, Mauldin, Anderson and Spartanburg continue to be at the top of the list for many companies. It’s a great area to live and do business and the location in between Charlotte (1.5 hours) and Atlanta ( about 2.5 hours) away make it a great location especially for transportation. On top of that, it’s a beautiful area. Check out what the Upstate SC Alliance had to say on LinkedIn.
This is a new networking event that is spreading mostly throughout the South at this point. It’s geared toward those who work in and around commercial real estate, construction and development. If you provide services to any of the aspect of commercial real estate, this really is an enjoyable networking experience.
The organizers have made it by invite only and the cost to attend is $50 plus the roughly 10% clip that Eventbrite takes. They do provide drinks and appetizers and when I went to my first event in January in Greenville, the people who attended were quite friendly and open to conversation.
If you’re a building owner or a tax professional, CPA, Enrolled Agent, etc., and you’re looking for a cost segregation specialist here in South Carolina, I’m happy to be of help. I’m based out of Greenville, SC and represent Cost Segregation Services, Inc. The company has been studying buildings for 20 years. During that time we have successfully completed more than 35,000 engineering-based cost segregation studies across all building types and classes in all 50 states. While I’m based in South Carolina, I can study any buildings anywhere in the U.S.
Cost segregation works on all types of buildings where the owner is receiving a lease or rent payment. In other words, it can’t be your personal residence. Typically the basis or cost needs to be north of $200,000 in order for the economics to work for the owner, but we have done some studies on buildings with a basis as low as $150,000. This works on commercial buildings, retail strips, self storage facilities, hotels, apartments, single family rentals, Airbnbs, short term rentals, offices, warehouses, industrial, shopping centers etc.
Call me at 864-276-1448. I can provide a no cost, no obligation quote so you can discuss it with your tax advisor to see if doing cost segregation makes sense for you financially.
The Upstate of South Carolina continues to attract investment from all across the country and more and more people come to realize that the cost of living as well as land and building costs are less here than in most places across the country. The proximity to Charlotte, NC as well as Atlanta, GA are a big help. I-85 runs through Greenville and provides great transportation access to the south as well as cities further up on the east coast. The Inland Port Greer is also a massive business driver helping companies with their supply chains as it has direct access to the Port of Charleston.
