Projects

Retail

Regional Mall

Engagement Overview:

Bedford was engaged by the owner of a suburban shopping mall to conduct a cost segregation study on their facility associated with a step-up taxpayer basis. The objective was to identify assets that could be moved to a shorter depreciation schedule and save taxes.

Property Overview:

This two story mall was acquired in 2004 and has a depreciable cost basis of $25,606,256. The facility is comprised of 950,000 square feet residing on 52 acres.

Engineering Process:Regional Mall

Our engineers examined all design and construction documents, contractor payment requisitions and other related data to determine the cost basis for every component in the building. Next, our engineer conducted an on-site study to identify and photograph all assets eligible for accelerated depreciation. Our team (site engineer, costing engineer and tax specialist) then identified assets that qualify as ‘Specialized Use”, i.e. outside normal use of that property type.

Estimate of Benefits & Savings:

Our pre-engagement estimate showed a potential of $4,750,000 in assets that could be scheduled to shorter depreciable lives. We estimated that a cost segregation study would result in $155,000 in first year tax savings.

Results:

Our study resulted in a total of $9,781,590 or 38.2% of the property qualified as 5 and 15-year property. As a result, the property owner saved over $253,000 for the current tax year and will realize $1,491,000 in 10 year Net Present Value tax savings.