Due Diligence & Cost Segregation for Logistics Portfolio Acquisition
Comprehensive due diligence and cost segregation study across 15-state logistics portfolio
$680M
Portfolio Value
28
Properties Analyzed
$48M
Tax Savings Identified
15
States Covered
Project Overview
A private equity-backed logistics REIT acquiring a $680 million portfolio of industrial distribution and warehouse properties across 15 states engaged CPCON to conduct comprehensive due diligence assessments and cost segregation studies to support the acquisition and maximize post-closing tax benefits.
The portfolio comprised 28 industrial properties totaling 14.2 million square feet, including modern last-mile distribution centers, cold storage facilities, cross-dock terminals, and traditional warehouse buildings. The acquisition required rapid due diligence within a 60-day exclusivity period while simultaneously preparing cost segregation studies for immediate post-closing implementation.
The Challenge
- Aggressive 60-day due diligence timeline requiring simultaneous property inspections across 15 states
- Diverse property types including cold storage, cross-dock, and automated facilities requiring specialized engineering analysis
- Limited construction documentation available for older properties requiring detailed field engineering analysis
- Complex tenant improvement allocations across multi-tenant properties with varying lease structures
- Need for IRS audit-defensible cost segregation studies supporting accelerated depreciation claims
Our Solution
Our real estate advisory team deployed a coordinated due diligence and cost segregation program, mobilizing engineering teams across all 15 states simultaneously to meet the aggressive acquisition timeline.
Property Condition Assessments
Comprehensive PCAs for all 28 properties identifying deferred maintenance, capital needs, and environmental concerns
Cost Segregation Studies
Detailed engineering-based cost segregation identifying components eligible for 5, 7, and 15-year depreciation
Capital Needs Analysis
10-year capital expenditure projections for each property supporting acquisition pricing and reserve planning
Environmental Assessments
Phase I ESAs for all properties with Phase II investigations where warranted by findings
Results Achieved
- Completed comprehensive due diligence for all 28 properties within 60-day exclusivity period
- Identified $48 million in accelerated depreciation through cost segregation studies across the portfolio
- Discovered $12.4 million in deferred maintenance enabling $8.2 million purchase price adjustment
- Generated $14.8 million in first-year tax savings through accelerated depreciation deductions
- Provided 10-year capital expenditure projections totaling $67 million supporting reserve planning
- Delivered IRS audit-defensible documentation for all cost segregation studies
Project Details
Industry
Industrial Real Estate
Service
Real Estate Advisory
Location
Multi-State (15 States)
Duration
8 Months
Team Size
18 Professionals
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