$2M Retail Property: Your Cost Segregation Breakdown

Retail properties have extensive site improvements — parking lots, signage, exterior lighting — that drive strong 15-year reclassification. A $2M retail asset generates $435K in accelerated depreciation.

$435,000Accelerated Depreciation

$160,950Est. Year-1 Tax Savings

54xReturn on Study Cost

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Property Type

Purchase Price

$216,450

Estimated Year-1 Tax Savings

$435,000

Accelerated Deductions

$2,995

Study Cost

54x

ROI on Study

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Estimates are for illustration only. Details

MACRS Depreciation Breakdown

Accelerated Depreciation by MACRS Class

Total reclassified from standard depreciation

5-Year Property$195,000

13.0%

7-Year Property$45,000

3.0%

15-Year Property$195,000

13.0%

39-Year Property$1,065,000

71.0%

Estimated Year-1 Tax Savings$216,450

Illustrative estimate. Final allocations vary based on property facts and report findings.

Estimated deduction based on typical cost segregation allocations. Actual study results may vary based on property-specific analysis.

What This Means for You

A $2M retail property is typically a 6,000-12,000 SF strip center or standalone retail building in suburban markets. Retail properties are particularly strong candidates for cost segregation because of their extensive site improvements.

The 5-year category includes floor coverings, decorative lighting, display shelving, point-of-sale infrastructure, and HVAC distribution components. The 15-year category captures the parking lot (often the largest single reclassified component), exterior signage, sidewalks, curbing, and landscaping.

At $2M, the study cost is $2,995 — delivering a 54x return through $216,450 in year-one tax savings. For NNN investors, cost segregation adds immediate depreciation benefits on top of favorable cash-on-cash returns.

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Compare: Commercial Properties at Different Price Points

Price	Accelerated	Tax Savings	Study Cost	ROI
$1M Office	$217,500	$80,475	$1,495	54x
$2M Retail	$435,000	$160,950	$2,995	54x
$2M Commercial	$435,000	$160,950	$2,995	54x
$3M Commercial	$652,500	$241,425	$2,995	81x

Frequently Asked Questions

Why are retail properties good candidates for cost segregation?▼

Retail properties typically have larger parking lots, extensive signage, and customer-facing interior finishes that reclassify into shorter MACRS categories.

Can I do cost segregation on a NNN-leased retail property?▼

Yes. As the building owner, you depreciate the property regardless of lease structure.

What is the study cost for a $2M retail building?▼

The study costs $2,995 for commercial properties between $2M and $5M.