Real Estate Tax Advisory and Expertise
Cost segregation allows clients to depreciate a new or existing structure in the shortest amount of time permissible under current tax laws. Our cost segregation studies provide an immediate increase in cash flow by reducing the burden of current tax liabilities, while adhering to strict IRS regulations and requirements. We also provide REIT testing and compliance services to ensure that our clients meet annual income and asset requirements and maintain REIT qualification.
CCA Spotlight: Real Estate
One of our specialty areas is the commercial real estate industry. The CCA team has been actively involved in organizations at the national level including the National Realty Association, the Real Estate Tax Institute and the National Association of Real Estate Investment Trusts. CCA team members were among the handful of professionals involved in the adoption of the UPREIT structure in the early 1990s which led to the proliferation of publicly traded REITs. We have served clients in the real estate industry for more than 30 years.
Members of our professional team are knowledge leaders in market segments including development and management, as well as in property uses: Hospitality, Office, Retail, Multi-Family, and Residential. Our clients include commercial architecture firms, management companies, builders and contractors, and building owners.
Example Engagement: Commercial Real Estate Lender Reporting
CCA was engaged by a commercial real estate investor to determine all lender reporting requirements on their various properties. CCA reviewed all mortgage documents to determine each lenders specific requirements. A comprehensive spreadsheet was prepared designating each reporting requirement and due date for all properties. CCA created one convenient tool for the client to use to anticipate future reporting requirements, allowing the client to take a proactive approach in meeting lender requirements.
Tenant Audit Services
Many value-added services, for example, a coffee shop or sandwich shop in the lobby of a building, are treated as tenants or subleases. These arrangements typically call for conditional expenses to be added to the lease cost.
Expenses may include:
- Percentage rent arrangements where the tenant pays a base rent, plus a percentage of sales over a predetermined ceiling.
- Allocation of common area maintenance (CAM) costs to the tenant.
- Payment of utility costs.
For non-profit organizations, unrelated business income (UBI) blockers may require payments made as a contribution to a foundation or other entity. In these cases, the payments may not be accurately tracked back to the original lease obligations.
For many organizations, these arrangements represent an unclaimed income or cost offset opportunity. A sublease or tenant audit can verify that all applicable revenue streams and cost offsets are recovered by the organization.
We frequently perform tenant audits to verify compliance with lease terms, in both commercial and not for profit organizations. Our professional staff includes experienced internal auditors as well as seasoned real estate advisors. We understand the nuances of unrelated business income, as well as best practices to ensure the nonprofit remains in compliance with the treatment of UBI. CCA’s professionals bring an average of 20 years’ experience to matters including compliance audits, workouts, debt restructurings and related income tax implications to litigation support including expert testimony and analysis for disputes involving real estate operations and complex real estate holdings.
