CHICAGO, Feb. 9, 2022 – JLL announced today that it has added cost segregation analysis services to its Valuation Advisory offerings. The new service is led by the Renewable Energy team and will enable its infrastructure and renewable energy clients, as well as owners of traditional commercial real estate, to maximize their tax benefits.
Cost segregation is an analysis on the accelerated depreciation for real estate and it looks at the building’s components to find qualified property that may decrease an owner’s tax liability. This type of analysis identifies shorter-life property, or personal property such as furniture, fixtures and equipment, from longer-life property, which is known as “real” property. The result can lead to a lowering of taxable income and taxes due, thus increasing cash flow into the business and allows an owner to reinvest the savings for growth.
“The U.S. government allows accelerating depreciation for certain building assets, and cost segregation plays a vital role for the client,” said Vice President Anthony Vu, who was brought on to build out this service line. “By componentizing a client’s building and applying advanced tax rules and regulations, they can improve their cash flow and reduce their tax burden.”
As a cost segregation engineer, Anthony Vu’s 15-year-career includes cost segregation studies for more than 300 properties of various building types for both private and public companies, resulting in a cumulative improvements value of more than $5 billion. He has extensive knowledge of renewable energy projects, including investment tax credits (ITC), capitalization and recovery periods.
According to Vu, cost segregation is also instrumental in renewable energy facilities’ depreciation and valuation. In particular, the valuation includes identifying eligible property that qualifies for the federal Business Investment Tax Credit.
“The eligible property is accelerated depreciation,” he said. “Renewable energy facilities can be in a structured finance transaction either as tax equity partnership or a tax sale-leaseback.”
Vu and his team report to Mike Bammel, National Practice Lead for JLL Valuation Advisory’s Renewable Energy business. Joining Vu are Senior Associates Jessica Anuvattanachai and Chris Cheah, who are cost segregation specialists. The team plans to add more cost segregation engineers and specialists by the end of the year.
“We are very excited to build this practice and have brought an experienced team who are very knowledgeable on what is eligible property,” Bammel said. “Under Anthony’s leadership, the team will identify those assets and support the findings to help avoid risk.”
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