Serving Our Clients in Multiple Ways
SPE SEt-Up and Administration
We handle all aspects of SPE creation and management. Generally, we use an LLC structure, however, the form of organization and jurisdiction for each SPE are selected in accordance with specific client objectives and requirements. Additionally, we strive to make our SPEs as transparent and accountable as possible (for client peace of mind). Lastly, we never comingle client entities and there is no common ownership among or between clients.
BUSINESS STRATEGY & Analysis
There are many ways of Integrating the SPE strategy into business plans and transaction scenarios to produce a competitive advantage or increase profitability. We have several tools and models available to analyze the potential benefits of utilizing an independent SPE - we always welcome the opportunity to assist in evaluating the benefits of SPE strategy for both our existing and our potential clients.
Using an SPE for leasing of business real estate and assets can yield not only cash flow and cost benefits, but also financial statement presentation and tax advantages. For instance, the tax deductibility of lease payments made to an SPE are not limited like debt interest payments may be - this can produce significant benefits for the client.
Qualified Intermediary - Like-Kind Exchanges
For 1031 Like-Kind Exchanges transactions we serve as the mandated Qualified Intermediary (QI). In this role we securely hold funds in accordance with U.S. Tax Code requirements to allow our clients to defer the income taxation on gains associated with the sale of real estate. We simplify the like-kind exchange process and are well acquainted with the myriad of rules and regulations governing like-kind exchange transactions.
Custom projects can take long periods of time to accomplish. The SPE strategy may improve the staging and execution of build-to-suits to yield additional options and benefits. There may be an advantage to having a fully tax deductible lease payment as opposed to a limited interest deduction for funds borrowed to fund an outright purchase. Also, many times we have had corporate clients establish SPEs to lease their newly-developed project with the ability to acquire it at some future time and to then perform a like-kind exchange for future property sales.
Investment REal Estate Purchase & Sale
Commonly, investors value increased flexibility for the timing of their sales and purchases or in separating the various components of complex transactions - many times for like-kind exchange and other tax related purposes. The recent tax-law changes are producing new opportunities in this evolving area of opportunity. Also, we are frequently able to, through our market contacts, assist our clients in identifying investment opportunities.
For certain like-kind exchanges (e.g., "safe-harbor" exchanges), we act as the required Accommodation Titleholder whereby we establish an entity to take title, on a temporary basis, to real estate that is being purchased (or sometimes sold), in order to facilitate the exchange transaction. These independent accommodator entities are established solely for the purpose of holding real estate for a specific individual client and transaction. As is the case with all of our SPEs, there is no comingling of entities among or between clients.
There are many reasons why an SPE may be useful for land purchases - for instance, to assure buyer anonymity or to "inventory" the land for a future use or like-kind exchange.
LIABILITY & RISK
Segregating risk and potential liability may be a motivation for using the SPE strategy. An SPE strategy may augment the benefits of an established captive insurance company and also be a factor to consider for new captives.