Commercial properties depreciate over 39 years by default. A cost segregation study reclassifies 25–35% of the building into accelerated classes — saving owners $50K–$500K+ in Year 1.
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Commercial properties depreciate over 39 years — that's 11.5 years longer than residential. This means even more value is locked up in slow depreciation, and cost segregation has an even bigger impact.
Commercial buildings contain substantial amounts of 5-year and 15-year property: electrical systems, specialized plumbing, HVAC distribution, flooring, cabinetry, parking lots, landscaping, signage, and site improvements. Restaurants and medical offices typically reclassify 30–35% of basis; offices and retail 28–34%.
If you've invested in tenant buildouts (TI), those improvements are often entirely reclassifiable as personal property or land improvements. This applies whether you're the landlord or the tenant (if you paid for the improvements).
You can perform a cost segregation study on any commercial property you currently own, regardless of when you purchased it. Using IRS Form 3115, you can catch up on all missed accelerated depreciation in a single tax year.
See detailed breakdowns for office, retail, restaurant, and industrial properties.
Virtually all commercial real estate qualifies: office buildings, medical offices, retail centers, restaurants, warehouses, industrial facilities, mixed-use properties, self-storage, and more. If you own it and it's depreciable, cost segregation applies.
Our commercial studies start at $1,495 for properties under $2M. Pricing scales with property value: $2,995 ($2M–$5M), $4,995 ($5M–$15M), and $6,995 ($15M+). The ROI is typically 20–50x the study cost.
Yes. 100% bonus depreciation applies to all qualifying property placed in service in 2025 and beyond, including commercial buildings. All property reclassified into 5, 7, or 15-year MACRS classes through cost segregation is eligible for full Year 1 deduction.
Yes. C-Corps at the 21% tax rate still see substantial ROI from cost segregation. On a $5M property, a C-Corp can typically save $200K+ in Year 1 federal taxes alone. Pass-through entities (LLCs, S-Corps, partnerships) at higher individual rates see even larger per-dollar savings.