Cost Segregation analysis to enhance CRE listing

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Bill Smith's picture
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Joined: 2013-08-26

Are any of you CRE listing brokers presenting the property tax deductions and improved cash flow of a Cost Seg Study in your Offering Memorandum? The benefits to a portfolio buyer with a 5+ year hold strategy are significant. Welcome your thoughts on this.

Bill Smith's picture
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Joined: 2013-08-26

Additional information to engage your thoughts...

Commercial Real Estate brokers can utilize a cost segregation analysis to differentiate their listings and/or Offering Memorandums by financially demonstrating how prospects and clients can enhance the ROI of a particular property. Some sellers even include the cost segregation study as part of the sales transaction, seen as a sweetener to the deal.

Commercial real estate investors are constantly pursuing ways to increase the cash flow generated from their properties. Cash flow is one of the critical factors they (and their bankers) consider in the purchase decision of a property. A cost segregation study can show better property performance to both the investor and the banker when evaluating a decision.

The introduction of cost segregation during the purchase process (or as a component of the transaction) means property owners can apply tax deductions immediately to improve cash flow.

Utilizing cost segregation as a property marketing tool, CRE brokers present a method to provide owners with additional cash they can use for future investments. The CRE market is very competitive and brokers should utilize every resource to develop new business. Introducing cost segregation upfront can certainly differentiate you and your listed properties.

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