12A — November 25 - December 8, 2016 — Professional Services — M id A tlantic
Real Estate Journal
www.marejournal.com
P rofessional S ervices
By Terri S. Johnson, Capstan Tax Strategies Cost Segregation Studies: Valuable Throughout the Real Estate Life Cycle
I
Hikes Act (PATH) creates fur- ther opportunity by extend- ing Bonus Depreciation for a record five years. Immediate expensing of capital expendi- tures is such a powerful tool, and the PATH Act permits bonus depreciation at 50% for Tax Years 2015, 2016, and 2017 before being reduced to 40% in 2018 and 30% in 2019. One caveat -- many com- panies considering cost seg- regation are concerned that the performance of a cost segregation study may in- crease the likelihood of an IRS audit. A cost segregation study does not increase the likelihood of IRS attention. However, audits are always a theoretical possibility, and as such all cost segregation studies should consistently be of the highest caliber. When choosing a provider, be sure to select an experienced firm with professional engi- neers who employ the IRS- preferred “engineering-based approach.” Terri S. Johnson, CRE, is a co-founder and manag- ing partner at Capstan Tax Strategies. n twenty commercial real estate transactions spanning the retail, office and industrial sectors, with a dollar value exceeding more than $50 mil- lion. GRP offers a complete range of asset management and construction management services through its in-house divisions and is also prepar- ing to initiate three separate development projects in the City of Baltimore. The company currently works, or intends to handle assignments throughout the Central PA, MD, DE and Northern VA areas including Washington, DC. “Greenspring Realty Part- ners exceeded each of our stat- ed goals during our first year of operation, led by our acquisi- tion activity which is intended to drive the long-term growth of the company,” said Levitt who, prior to co-founding the company, owned a homebuild- ing and land development firm. “Our team also created a pipe- line of development projects, completed significant third- party brokerage transactions and established our corporate brand throughout our core market areas.” n
n its purest form, a cost segregation study is a de- tailed engineering-based
a n a l y s i s do c umen t - ing the ac- celeration of depreciation deduct i ons for owners of commer- cial real es- tate and for
Terri S. Johnson
tenants who have invested in leasehold improvements. The cost segregation study identifies and reallocates eli- gible assets into IRS-defined modified cost recovery system (MACRS) 5, 7 and 15-year cost recovery periods, significantly shorter than the conventional 39-year period associated with commercial real estate and the corresponding 27.5- year period for multi-family or nursing home/assisted living properties. The taxpayer is not increasing the deprecia- tion value but is shifting the deductions towards the ear- lier years of ownership. This front-loading of depreciation offsets income and lowers the tax burden. This benefit has
acquisition and management of quality income-producing multifamily properties with- in strategic growth markets throughout the United States. The firm owns and manages a portfolio in excess of 7,300 multifamily units valued at more than $1 billion. Rieder is directly involved in all of the company’s investment and property management activities, drawing on nearly two decades of experience as a real estate investor, owner and manager. “I am pleased to have been honored by Real Estate Fo- rum and included among such driven the use of cost segrega- tion studies for many years among real estate owners who recognize the tax advantages of property ownership as an important component of an overall investment strategy. The old axiom rings true -- a dollar today is worth more than a dollar tomorrow. Many property owners are under the misconception that have built, and look forward to continuing to mentor our team and providing our current and future clients with exceptional service and earning their trust and respect,” he added. NAI Mertz is in the midst of another strong year of sales and leases. Through September, the company has completed 225 transactions for over 4.5 million s/f and close to $200 million in total volume. “We weathered through the recession in our industry and we have been in growth mode
impressive company,” said Rieder. “CLP’s portfolio has grown considerably within the last few years and this recogni- tion reflects the success of the entire Castle Lanterra team, and their tireless dedication to pursuing opportunities that meet or exceed our strict in- vestment criteria.” Real Estate Forum is one of ALMReal Estate Media’s three highly regarded brands. Along with GlobeSt.com and the Re- alShare conference series, ALM provides business research, education and information to over 250,000 commercial real estate professionals. n cost segregation studies are only worth performing on newly constructed properties. While it’s true that perform- ing a study on a newly con- structed property is a great idea, in reality cost segrega- tion studies are valuable throughout the life cycle of a property (see table). Recent legislation further enhances the utility of cost for the past several years—the only way to look is up. Building NAI Mertz into a highly respect- ed and successful commercial real estate firm has been one of my greatest accomplishments. I take great care in providing my team with the knowledge and tools it takes to blossom into true professionals. And, I am equally proud of knowing that our firm’s level of professional- ism and sophisticated knowl- edge of our work has led to our outstanding reputation in the industry,” concluded Mertz. n
segregation in every phase of a property’s life. The Tangible Property Regulations clearly delineate which costs must be capitalized, and which may be expensed. These guidelines have expanded the utility of the cost segregation study, allowing professionals to ex- pense appropriate assets with confidence. The recent Pro- tecting Americans from Tax BALT IMORE , MD — Greenspring Realty Part- ners (GRP) , in its first year of operations, acquired nine separate properties in the Mid-Atlantic region, and now controls a diverse portfolio valued at more than $100 mil- lion in commercial real estate investments. The full-service company, headquartered in Lutherville, MD, was co- founded by Eric Levitt , Dan Flamholz and David Berg , three principals who combine for nearly fifty years of real es- tate experience spanning the commercial office, industrial/ warehouse, mixed-use, retail and residential categories. According to the co-founders of the company, the primary strategy of Greenspring Realty Partners is to expand its current portfolio comprising more than 1.5 million s/f of space, by iden- tifying and acquiring value-add, opportunistic real estate proper- ties. This will be supported by real estate development activity and brokerage transactional work for both its own portfolio and third-party clients. Also in its first year of op- eration, Greenspring Realty Partners brokered more than
Elie Rieder named one of Real Estate Forum’s ‘50 Under 40’ SUFFERN, NY — Real Estate Forum magazine has named Castle Lanterra
Greenspring Realty Partners acquires nine properties in 1st year of operation
Properties’ (CLP) found- er and CEO Elie Rieder to its “50 Un- der 40” list for 2016. The publication d e s c r i b e s this year’s
Elie Rieder
as NAI Global’s top produc- ing broker throughout the worldwide network of 6,700 professionals. He followed that up with a second place finish in 2015. “I am committed to con- tinuing the leadership of our family-owned business, while building on our success in the industry through any real es- tate cycle we may encounter,” said Mertz. “I share the vision of my parents and take pride in the amazing company they winners as the “cream of the crop,” selected from more than 300 nominees. Formed in 2009, CLP is a pri- vately held real estate invest- ment company focused on the
continued from page 4A NAI Mertz celebrates 35th year. . .
Made with FlippingBook flipbook maker