Savannah, GA is one of the fastest growing areas in the country and commercial real estate is benefiting from that growth. The Port of Savannah is a huge driver of the growth and particularly industrial real estate as demand for warehouses grows.
I love Savannah! It’s a beautiful, historic Southern city that has such a great mix of new and old. Many buildings are being renovated and many others are being torn down and new ones going up. If you own commercial real estate in and around Savannah, GA and you want to discuss cost segregation, please reach out and I’d be happy to talk.
Regularly I get questions from CPAs, tax advisors, CRE brokers and building owners if a particular building is good for cost segregation. The fact of the matter is, most buildings with a basis north of $200,000 can generate a nice result with cost segregation. It will depend upon whether or not the owner can benefit from the increased accumulated depreciation expense our studies generate. We always encourage owners to consult their tax advisor before moving ahead with a cost segregation study.
In the video below, I run through some examples of recent sales and plugging in the asset details into our Cost Seg Calculator to see what kind of results might be expected from a cost segregation study.
This is a phrase I hear regularly from both building owners and CPAs. When I hear it from building owners, it’s usually something that they picked up from their CPA. The topic might have come up and then the tax advisor says, “I’m not sure it’s worth it” when it comes to doing a cost segregation study.
This just came up recently on a $3MM industrial building we studied. They weren’t sure if it was worth it because of this specific building. The owner was able to take a $300,000 deduction this year because of doing a study. That’s well over $100k in income tax savings and yet prior to getting an estimate from me, they weren’t sure if it would be worth it or not.
We can study buildings with a basis as low as about $200,000 and still make it work for the owner. Almost every building is worth it if there is some basis. Sometimes it becomes a challenge with some 1031 exchange buildings and if you are planning to sell the building shortly. But if you are going to hold it for at least the next 2-3 years, it often makes a lot of sense to do a study.
As always, please consult your own tax advisor to make sure you can take advantage of the increased accumulated depreciation our studies generate. But have that discussion after you have an estimate in hand. Then you will truly be able to make an informed decision about your building and if it makes sense to study it.
If you are a commercial real estate owner or a commercial real estate broker, you’re going to want to familiarize yourself with our new cost segregation calculator. This is an excellent resource for you to get an idea what you might expect from a cost segregation study for your building.
Go to www.CostSegCalc.com and scroll down the page. You’ll see on the right hand side where you can enter in your asset details. No registration is required. Put in the cost basis, when it went into service, tax year etc and we will provide a range of what you can expect.
Below is a short demonstration as to how you can use this cost segregation calculator from CSSI Services.
If you like this information, be sure to check out more of my videos on my YouTube Channel. Connect with me on LinkedIn.
If you’re involved in commercial real estate in any way from being a broker, banker, investor, owner, dealmaker, CPA, tax advisor, financial advisor, General Contractor or property manager, you are going to want to have a decent understanding of the BBB. I do not believe this is hyperbolic to say this is the biggest bill to ever hit commercial real estate. We have been digging into the bill and are looking forward to presenting the findings tomorrow, Wed. July 23rd at 11am Eastern. Please consider joining us. There is no cost. This will be a continuing education course for CPAs and they MUST register in advance in order to get credit for the course.
Breaking Open the One Big Beautiful Bill: Important Changes and a Deep Dive into Accelerating and Expensing Strategies
Topics include:
100% Bonus Depreciation: what qualifies and what does not
Bonus Depreciation – understanding the binding contract date, acquisition date and in-service date as 100% bonus is affected by these dates
179 Expensing strategies and new limits
Qualified Production Property
Research & Development Tax Credits are back
179D Energy Efficiency Tax Deductions are phasing out in 2026
Potential update on Partial Asset Disposition changes and improvements
This webinar is designed for CPAs to get continuing education credit but this will be valuable for CRE brokers, investors and of course owners of commercial property.
100% bonus depreciation is now part of the permanent tax code. Cost segregation will play a bigger role in every deal you do going forward. CRE brokers and owners don’t need to be experts, but it will be good to know a bit more about it as you incorporate it into your every day practice.
Wednesday, July 23rd, 2025 11:00am – 12pm Eastern
Breaking Open the One Big Beautiful Bill: Important Changes and a Deep Dive into Accelerating and Expensing Strategies – Registration Link
CSSI is one of the leading providers of engineering-based cost segregation studies in the U.S. We have completed more than 55,000 studies across all building types and classes. This has worked every single time it’s been done.
AI is going to affect every industry and commercial real estate is ripe to be impacted by this technology. Many are trying to figure out how to leverage it to make their own businesses better and more efficient. Thomas Stephenson does a great job of showing different use cases CRE AI.
Topher Stephenson is head of operations at Aspire CRE, a real estate brokerage in Houston, TX and is someone you should follow if you’re in commercial real estate and want to learn more about AI and how it’s affecting the business. Below is his one of his tweets talking about
THE NEW CHATGPT IMAGE UPDATE IS REAL
“TAKE THIS SITE PLAN AND MAKE IT PRETTY”
Countless brokers have asked me if AI can do this. The answer was “No” until today.
That’s how fast this is changing.
(Yes it got some text wrong but if you know how to use AI you’re not worried… pic.twitter.com/KWKB8GRx8j
I will also recommend you check out the recent tweets from Life Sci RE Guy. He has some excellent images he created with the use of AI.
Commercial real estate seems to be one of the slower industries when it comes to the adoption of AI, but I think this is coming full steam ahead for it.
Those who self-construct their own properties and qualify under the Small Business Rules for 263A might be able to EXPENSE much of their indirect / soft costs to develop, finance and construct the building. This can often be between 10-30% of the cost of the overall project. It’s a game changer. Everyone I know capitalizes these costs because that has been the norm, but it’s been available for expensing since 1/1/2018 due to the Tax Cuts and Jobs Act.
Let’s say you build a new $1,000,000 office warehouse. What if instead of capitalizing those indirect and soft costs across various class lives if you do cost segregation (5, 15, 39 year) you could just expense those and take the deduction right now. It’s has a dramatically different tax impact saving you tens of thousands in income taxes. It also is not subject to recapture tax.
If you meeting the qualifications as a Small Business owner and this is a self-constructed asset, it will be worth it for you to reach out and get an estimate of the costs for the study and the tax savings you’d be looking at if you apply this to your building.
What costs are eligible?
Construction interest
Engineering and achitectural fees
Portions of soft costs and permits
Portions of building permits
Other development costs
Might you qualify?
Property built since 2018
Self-constructed asset (owned during construction)
Small business taxpayer (gross receipts under $30MM/Year)
Not a syndicate (there may be exceptions – let’s discuss)
Most people are not aware of this because it was only instituted with the Tax Cuts and Jobs Act back during Trump’s first term. This applies to buildings constructed since 1-1-18.
BTW, we can do a look-back study on properties you have developed and still own going back to 1-1-18. Our team will take care of drafting the Change of Accounting Form 3115 and do the negative 481(a) calculation. Your tax advisor would then sign off.
For self-constructed assets, it might be that you are operating your business out of the property. It could be that you are an investor having a property built and you’re hanging on to it. The study works on tenant improvements and building expansions as well. If the construction costs are $250,000+, it’s likely the cost benefit will be in your favor. Take a look. Reach out. I’d be happy to talk with you and get you the information you need to talk with your tax advisors.
Constructing buildings is not cheap these days. I know many have a difficult time of making the numbers work. If you could expense 10-30% of the project right away in year 1, I would think your financials on the project would suddenly look a whole lot better.
CSSI will be hosting these webinars once per month in 2025 so if you can’t make this, there will be others. Just let me know if you’d like to be on my mailing list. Also, let me know if you’d like a copy of the presentation slides and video recording. While these tend to be geared toward CPAs as this one will be a continuing education course for CPAs, CRE brokers and commercial property investors are welcome to attend if you’d like to learn more. There is now cost.
CSSI Webinar: Applying 100% Bonus Depreciation Retroactively for Commercial Property and Short-term Rentals (Airbnbs, VRBOs).
Wednesday, February 19, 2025 at 11:30am to 1pm Eastern
Sale-leasebacks have surged in popularity over the past few years, offering building owners a way to maximize their sale price while securing a long-term lease that enhances the property’s value. A well-structured sale-leaseback often results in a desirable cap rate, making the transaction attractive to investors.
But there’s another major financial advantage many overlook—cost segregation.
For buildings involved in a sale-leaseback, a cost segregation study is a must. These are often income-producing properties with long-term owners (typically 3+ years), making them ideal candidates for accelerated depreciation. Instead of keeping the entire asset on a 39-year depreciation schedule, 20-30% (or more) of the building can often be reclassified into shorter depreciation lives, leading to:
✅ Increased cash flow ✅ Higher investment returns ✅ Lower tax liability (even if it’s just a deferral, the time value of money matters!)
In short, cost segregation is a no-brainer for sale-leaseback transactions. Running the numbers costs nothing—and it gives property owners and investors a valuable opportunity to discuss tax-saving strategies with their CPA.
CRE brokers, take note: Getting cost segregation estimates for your clients not only adds tremendous value but also positions you as a well-prepared, knowledgeable advisor. In a competitive market, small insights like these can set you apart.
Want to see what cost segregation can do for your next sale-leaseback deal? Let’s run the numbers—at no cost to you.
Take a listen to Trinity Partners Greenville Managing Broker, Partner, Edward Wilson and Senior Broker, Grayson Burgess and they discuss the market outlook for commercial real estate in South Carolina. Edward and Grayson work across the state and are based in Greenville, SC. I’ve worked with both of these gentlemen and they are tremendous resources for commercial real estate in the Upstate of South Carolina.
