McGuire Sponsel partners with multi-family investor groups to optimize the value of assets and increase cash flow through a big picture approach to tax studies.
Whether it is a single building or a large complex, our professionals strive to optimize the value of assets being moved from a 27.5-year depreciable life to shorter 15 and 5-year asset lives. Our property tax team focuses on identifying opportunities for reducing both real and personal property tax assessments on larger developments over 50,000 sq. ft. or with more than 100 units.
As units are renovated or facilities are newly constructed ground up, energy-efficient projects may qualify for additional benefit through a 45L or 179D study. In addition, we understand the frequent turnover of residents and the constant state of repairs and renovations. Our team is well versed in the 263(a) Repair Regulations to help increase the benefit recognized by the taxpayer by accounting for repair expenses and partial dispositions.
McGuire Sponsel takes a “big picture” approach with every project to deliver maximum benefit.
Success Story: Purchase and Renovation
McGuire Sponsel reviewed an apartment complex located in Portland, OR that was acquired for $24 million in 2016 and underwent a $9 million renovation in 2018. The initial result for the 2016 acquisition was an increase to the first year cash flow of $1,146,501. However, our team of engineers identified over $5 million of assets that were partially disposed due to the renovation. The renovation and partially disposed assets generated an additional increased cash flow of $1,987,501 in 2018.
Success Story: Purchase
Our team was contacted to perform a cost segregation study on an $88 million apartment complex that was acquired in Orlando, FL. The study identified personal property such as carpet flooring, decorative millwork, decorative wallcovering, and vinyl wood flooring. The result was an increase in the first year cash flow of $4,235,176.