Due Diligence
More Than a Recommendation, It's a Necessity
Consulting on the applicability of designation as railroad operating property prior to the acquisition or development of rail-served industrial property is a critical step in ensuring the long-term success and profitability of your investment. This designation affects more than just the operational logistics of your property—it plays a key role in your asset management strategy and can lead to transformational savings not only in your tax liability but in regulatory fees and operational costs. Skipping this crucial consultation could expose you to unforeseen expenses that may significantly impact your bottom line.
Regulatory compliance is streamlined for properties designated as railroad operating. This ensures smoother interactions with state and federal agencies, and you may avoid fines or costly retrofits that could be required if your property is misclassified. A property without the correct designation might also face challenges in securing favorable operational agreements with rail carriers, leading to higher costs in transportation, delivery schedules, and facility management.
In addition to tax and regulatory savings, the proper designation may provide you with greater leverage in negotiations with rail carriers, allowing you to secure more favorable terms for your property. Whether it's securing better interchange agreements, reducing bunching and late deliveries, or ensuring more reliable service, the right designation positions you as a stronger negotiator, potentially saving your company millions in operational costs and headaches down the line.
In short, consulting on the applicability of railroad operating designation before acquiring or developing your rail-served industrial property isn't just a recommendation—it's a necessity. The upfront effort can safeguard your investment, optimize your operational efficiency, and lead to extraordinary long-term financial savings.
