Sometimes timing is everything. When the owners of this 108-unit apartment complex in Lansing, Illinois, decided to sell, they had less than three weeks to maximize their tax position before closing. That’s where cost segregation became a game-changer — and why we’re set up to deliver rush studies when clients need them most.
This wasn’t a luxury property, but that didn’t matter. Class B apartment buildings — with their 1 and 2 bedroom units, common areas, site improvements, and extensive parking — offer excellent cost segregation opportunities regardless of their market positioning. Our engineering team moved quickly, identifying opportunities across the 125,000 square foot property and its 4.68-acre site: interior finishes, appliances, flooring, site utilities, parking lot improvements, and landscaping.
The results made the tight timeline worthwhile. Because the property was purchased in 2011, the owners were eligible for catch-up depreciation through a 481(a) adjustment — $531,158 in catch-up depreciation plus an additional $156,778 for the current year. Even accounting for depreciation recapture at sale a year later, the tax savings were substantial. The study paid for itself many times over and put significant cash in the owners’ pockets right when they needed it most.