Cost Segregation Analysis: Riverfront Plaza, Milwaukee, WI
A 100-year-old, six-story, 10,328 sq. ft. downtown office building
All cost segregation studies are designed to identify assets that can be depreciated more quickly than buildings, to reduce the tax liability and improve cash flow in the early years of ownership. This project was unusual because it involved the renovation of an existing building rather than the purchase of a new one. Because we didn’t have the original building drawings for this 100-year-old building, we had to use our engineering expertise to identify the components eligible for accelerated depreciation. We also had to think creatively to recognize, for example, that the operating cost of utilities could be treated as a tangible asset, eligible for accelerated depreciation. As with most urban structures, most of the value in this small building was in the assets inside – in the office space on the top floors and in the retail space and restaurant on the ground level. Identifying those assets and classifying them correctly, consistent with IRS guidelines, was essential to maximize the tax benefits for the client.
Cost segregation analysis requires an understanding of buildings, tax rules and business operations. Criterium Engineers is one of the few consulting engineering companies with expertise in all those areas. Our experienced professional engineers are equally adept at reading blueprints, cash flow ledgers and IRS rules.
Property Condition Assessments and Environmental Site Assessments: Multiple Properties
Varied commercial properties in many different states.
The client, AEI Property Corporation, acquires properties for inclusion in real estate investment partnerships and trusts. Timing is a major challenge for these building assessments, because a fast turnaround is often required to meet securitization deadlines. The varied locations and large volume create additional challenges. Criterium Engineers evaluated 27 buildings for AEI in 17 states last year. Because REITs are sold to investors, standard inspection reports must sometimes be modified to address specific investor concerns. At AEI’s request, we added a “visual mold inspection” section to our reports, verifying that the inspection did not identify any evidence of mold.
Criterium Engineers has affiliated offices all over the country staffed by highly qualified engineers, ensuring a fast, professional response to client requests. Senior engineers in Criterium’s corporate office review all property condition and environmental assessment reports to ensure that they meet both the client’s needs and the company’s standards for quality, consistency, and professionalism. Our ability to provide the services clients need where and when they need them, customized to meet their unique requirements, explains why national companies like AEI rely on Criterium for a full range of consulting engineering services.