CASH BENEFIT ANALYSIS
| PROPERTY |
%OF
BUILDING COST |
$CONSTRUCTION/ACQUISITION |
| |
RECLASSIFIED
(1) |
$2 MILLION |
$10 MILLION |
| |
|
CASH |
CBM(2)
|
CASH |
CBM(2)
|
| |
|
|
|
|
|
| Apartment |
3-15 |
40,000 |
16 |
200,000 |
45 |
| Department Store |
5-15 |
50,000 |
25 |
250,000 |
80 |
| Office Building |
8-12 |
50,000 |
20 |
250,000 |
50 |
| Medical Office |
10-15 |
60,000 |
30 |
300,000 |
100 |
| Medical Clinic |
20-30 |
115,000 |
40 |
575,000 |
115 |
R&D Facility |
20-30 |
115,000 |
40 |
575,000 |
100 |
Fast Food Rest.
|
|
|
|
|
|
Class 57 – 5 years |
40-50 |
200,000 |
100 |
1.0M |
330 |
Retail |
25-35 |
140,000 |
25 |
700,000 |
90 |
Supermarket |
30-35 |
150,000 |
50 |
750,000 |
190 |
Hotels |
15-20 |
85,000 |
17 |
600,000 |
50 |
Hospital (for profit) |
30-35 |
150,000 |
30 |
750,000 |
75 |
Manufacturing (heavy) |
30-40 |
160,000 |
27 |
800,000 |
67 |
Manufacturing (light) |
15-20 |
85,000 |
21 |
450,000 |
57 |
Warehouse |
8-10 |
40,000 |
20 |
200,000 |
50 |
Distribution |
10-15 |
60,000 |
24 |
300,000 |
75 |
Data Center |
25-30 |
135,000 |
23 |
675,000 |
84 |
(1) Excluding apartments, this column shows the reclassification
of costs originally buried in a 39 year building life to 15 year
site improvement and 5 or 7 year personal property. For apartments,
building shell depreciable life is 27.5 years, while site improvement
is 15 and personal property is 5. result is a significant cash benefit
from accelerated tax depreciation. This cash often equates to $.20
(20%) per dollar reclassified, or more. That amount is a cash return
(after tax net present value)
(2) CBM- Cash Benefit Multiple
is the multiple comparing the average after tax present value (cash
equivalent) to one-half of the average expected fee (cash outlay).
|
