Cost segregation new Starbucks construction?
Purchasing a new construction Starbucks.   2500 sq ft.

Is it worth performing a cost segregation study?  It's an10 yr initial lease, with 6 5 yr options.

My plan is to hold for perhaps until I get the options to renew then look at selling.

Has anyone done one of these before for this type tenant?
[{"id": "g40ybmj", "text": "Curious on the type of lease that Starbucks is now signing. I read that they sent letters to all existing landlords indicating that they were mandating a rent reduction/deferral/haircut. Do new leases contain extra \"out\" clauses or allow them to terminate for convenience at some point? I don't know much about cost seg other than I had an accountant talk me out of it because of recapture risk.", "replies": [{"id": "g40zq1m", "text": "I was concerned as well and that we looked into during due diligence.  But thankfully nothing like that in the lease at all.  Location is a good one with a drive thru and lots of adjacent rooftops.  And nice outdoor seating.", "replies": [{"id": "g41rfmw", "text": "you're in good shape then.", "replies": [], "depth": 3}, {"id": "g41ukcq", "text": "Yea I think the drive through saves the day. I've heard they are primarily asking for concessions in spots where walk-in was the only way to serve, eg malls", "replies": [], "depth": 3}], "depth": 2}, {"id": "g41emea", "text": "Recapture risk is overblown. Either you pay the tax now or you pay it later. Time value of money tells you to pay it later. I hope your accountant ran a proper after-tax cash flow analysis so you could see the benefits for yourself.", "replies": [{"id": "g41rv4x", "text": "Unless interest rates go negative in which case, pay now.", "replies": [{"id": "g41v1cy", "text": "So you don't think you can get yield anywhere? There's nothing you want to invest in? You wouldn't take the money and pay down debt?", "replies": [{"id": "g41xas6", "text": "Right now, sure. In a negative rate world? It's a crazy world once we start going do that and we will do that fairly soon", "replies": [{"id": "g422epe", "text": "How soon? Gonna need to refi 3 loans once we hit negative rate", "replies": [], "depth": 6}, {"id": "g422xvv", "text": "That's what I'm getting at. People are going to be doing all sorts of irrational stuff, so the savvy investors here should have investment opportunities and strong financing options. You have to look at the entire investment universe. \n\nAlso, the ECB has had negative interest rates off and on for awhile now, and yet there are still investment opportunities in the EU.", "replies": [{"id": "g42aa0f", "text": " If you think caprate compression is bad now. It'll be 10x worse. I've run the numbers on SFH in a number of countries and even with very very low rates (the negatives rates haven't really appeared in loans just the central bank rates) you simply will not cash flow without down payments that are **very** high because of course such low interest rates cause asset inflation.", "replies": [{"id": "g42cw0l", "text": "I'm sorry, but I still don't see why anyone should pay taxes today that they could defer, unless there is a rate arbitrage situation, but that's not what we're talking about.", "replies": [{"id": "g42dilc", "text": "So in germany right now [80 banks charge interest](https://news.bitcoin.com/banks-negative-interest-rates-germany/#:~:text=The%20ECB%20has%20held%20its,historic%20low%20of%20-0.5%25.&amp;text=Banks%20in%20Germany%20cannot%20charge,they%20can%20charge%20new%20customers.) on deposits over a certain amounts. So if you have to pay 100k in taxes today or 100k in taxes in a year when you've been charged 500 because you couldn't find something better it actually makes sense to pay it now. Negative interest rates fuck with everything.", "replies": [{"id": "g42ecs4", "text": "But if you're a U.S. taxpayer, and you save on taxes today, you can invest in any number of investments that will likely pay off over the near, intermediate and longterm. I don't think any of my clients have ever used my services because they were going to park their savings in a savings account. I'm not sure what point you're trying to make, but you're going to have to make it to someone else because I'm out. \n\nIf anyone has any questions about cost seg, feel free to reach out. Peace!", "replies": [], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "g42v3p0", "text": "Starbucks makes 3x off most their drive-thru sales than inside. They were one of the most prepared for this pandemic.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g41facn", "text": "If you're going to hold for 10 yrs or more, I would say it's going to provide significant value. Also, you'll likely have at least one remodel in that 10-yr holding period, so it will really help with the disposition analysis. If you want a free estimate of the benefit PM me. I've done about 300 CS studies a year for the past 6 years.", "replies": [], "depth": 1}, {"id": "g42c4tb", "text": "It just has to be that is always beneficial to cost seg a Starbucks.  You're paying a fuckton for it being a Starbucks so intuitively (not my asset class by a long shot) the land value ratio must be pretty low.", "replies": [], "depth": 1}, {"id": "g42er9h", "text": "How much does it generally cost to do such a study?   I've never ordered one.  Is it based on the amount of the items and the development?  The cost of time of the person who is doing?  Or...?", "replies": [], "depth": 1}, {"id": "il3sfia", "text": "1031 Exchange for Starbucks, FL\nPurchased 06/2021, appx 2,200 sf\n\nPP $2,554,000 (of which $850,000 is total depreciable basis)\n\nOwner's 2021 depreciation expense without cost segregation - $10,256\nWithout cost segregation - $402,228\n\n\n*This is one of our clients, a Starbucks\n\n*I am a partner with a Boutique cost Segregation firm so if you have any questions feel free to reach out to me here to help!!", "replies": [], "depth": 1}, {"id": "ituutip", "text": "1031 Exchange for Starbucks, FL\nPurchased 06/2021, appx 2,200 sf\n\nPP $2,554,000 (of which $850,000 is total depreciable basis)\n\nOwner's 2021 depreciation expense without cost segregation - $10,256\n\nOwner's 2021 depreciation expense with cost segregation - $402,228 \n\nThis is my client full disclosure I work for a boutique cost segregation firm.\n\nShould you have any questions feel free to DM me!!", "replies": [], "depth": 1}]