Increased 1st Year Cash Flow by $1.6M After Client Completed a Study

Light Manufacturing Distribution Facility in North Carolina

Meridian was engaged to conduct a Cost Segregation study for a $19.2 million distribution facility in North Carolina. Roughly $1.2 million in FF&E and easily identifiable short life assets were already accounted for on the depreciation schedule. This allocated $18 million locked in the 39 year building category.
Our construction engineers performed an exhaustive analysis of all available construction drawings and specifications, contractor payment applications, invoices, and other supporting documentation. We prepared a detailed evaluation of all accumulated data on a property unit basis for cost allocation purposes under the provisions of the Internal Revenue Code. We consequently executed an on-site inspection of the 185,000 square foot facility to verify, photograph, and document the property. Finally, our internal audit team of senior construction engineers and tax specialists reviewed and certified its completeness and accuracy.
Leveraging the detailed site visit and subsequent calculations using construction plans and invoices, Meridian was able to successfully reclassify just over $6.5 million, or 36% percent of the construction costs into 5 and 15 year property. This generated an increased first year cash flow in excess of $1.6 million.