Projects

Office

High Rise

Engagement Overview:

Bedford was engaged by the owner of a highrise office building to conduct a cost segregation study following acquisition. The objective was to identify assets that could be moved to shorter depreciable lives and to save taxes.

Property Overview:

This 35-story office building was acquired in 2004 with a total depreciable cost basis of $112,760,352. The building contains 650,000 sf located on 1.34 acres.

Engineering Process:

Prior to the field activities, our engineers closely examined the lease agreements supplied by the previous owner to identify all landlordsupplied tenant improvements. The second stage of our work included the review of all relevant construction documents, contractor payment requisitions and other related data to determine the cost basis for every component in the building. Next, our engineers conducted an onsite study to identify and photograph all assets eligible for accelerated depreciation. Significant attention was given to the evaluation and application of relevant Tax Court cases to support our findings pertaining to several largescale improvements at the facility. Following the site visit, our team (site engineer, costing engineer and tax specialist) then identified assets that qualified as IRC Section 1245 Property and land improvements as well as pricing the entire basebuilding structures and other improvements remaining as 39-year property.

Results:

Our study rescheduled $14,884,370 or 13.2% of the property to 5, 7 and 15-year property. As a result, the property owner saved over $700,000 in tax payments for the current tax year and will realize $3,629,900 in 10 year Net Present Value tax savings.