case studies

New build of a heavy manufacturing facility

A heavy manufacturer’s business had grown out of its existing facility and decided to build a $3 million plant. Working with contractors and architects throughout the development of the building, Our cost segregation team was able to reclassify 2 percent of costs to a 5-year depreciation period, 50 percent to 7-year property, and 15 percent to 15-year property. This resulted in approximately $390,000 in present value cash flow savings—13 percent of the total cost of the project!

Purchase of existing processing facility

Recently, a processing company purchased an existing facility in order to expand its operations. The facility cost was $3.4 million. Our cost segregation team was able to reclassify 34 percent of the $3.4 million of the total purchase price into short-lived property. Reclassifying these costs resulted in present value cash flow savings of more than $160,000.

Purchase and renovation of an existing office building

Cost segregation studies are not limited to industrial facilities. A $2.95 million office building was recently purchased and renovated. Originally built in the 1970s, the building’s costs—such as land improvements, carpeting, wall coverings, special plumbing, millwork, and electrical work—were reclassified for a total savings of $125,000, a 4 percent rebate on the overall cost.