Don’t forget the details… some often overlooked aspects of due diligence.
When acquiring commercial real estate, the more significant due diligence items are easy to review and digest such as purchase price, rate of return, location, tenants, etc. What about the smaller details, especially when it comes to reviewing the leases? Here are some examples of often overlooked, yet critically important, aspects you should be looking for in a retail transaction:
Commercial property owners should consider a cost segregation study.
Have you heard of a cost segregation study? Surprisingly, most commercial property owners haven’t. This IRS approved tax strategy allows property owners to increase cash flow and decrease tax liability by frontloading depreciation deductions in the early years of buildings ownership. The process identifies, separates and reclassifies qualified assets in your building from 39-year or 27.5-year class lives to much shorter 5, 7, and 15-year class lives.