Integra Realty Resources helps commercial real estate owners, investors, developers, and their advisors evaluate whether a cost segregation study may support accelerated depreciation, cash flow planning, and broader tax strategy.
Through our work with Capstan Tax Strategies, we support cost segregation analysis for acquisitions, newly constructed assets, renovations, expansions, capital improvements, and certain look-back scenarios.
Who Should Consider a Cost Segregation Study?
Cost segregation may be worth exploring for owners, investors, developers, and other stakeholders involved with commercial properties or qualifying real estate improvements.
You may be a good candidate if:
- You recently acquired a commercial property
- You placed a newly constructed asset in service
- You completed significant renovations or expansions
- You made substantial capital improvements
- You want to revisit a prior project through a look-back study
A study is often most useful when evaluated early, particularly soon after acquisition, construction, renovation, or placement in service. However, cost segregation may also be relevant for prior projects if the opportunity was not reviewed at the time.
How Cost Segregation Works
A cost segregation study is an engineering-based analysis that identifies and quantifies building components that may qualify for shorter tax recovery periods. These components may be reclassified into categories that depreciate more quickly than the building as a whole, helping shift allowable deductions into earlier years of ownership.
A Simple Three-Step Process
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Assess Fit
IRR reviews the property type, asset timing, ownership context, and scope of work to determine whether cost segregation merits a closer look. -
Perform the Analysis
With Capstan, we identify and evaluate building components, site improvements, and related assets that may qualify for accelerated depreciation. -
Review the Results
You receive clear findings to review with your accounting and tax advisors, including where potential value may exist and how the study may fit into your broader tax planning.
Where Value Is Typically Found
Depending on the property, assets that may qualify for shorter recovery periods can include carpet, cabinetry, decorative lighting, specialty electrical and plumbing, security systems, landscaping, paved parking areas, sidewalks, and exterior site improvements.
The more specialized the facility, the greater the opportunity may be to identify assets eligible for accelerated depreciation.
Cost Segregation and Broader Tax Planning
A quality cost segregation study can also support related tax planning strategies, including bonus depreciation, Qualified Improvement Property analysis, Partial Asset Disposition, and, where applicable, 179D-related considerations.
For that reason, cost segregation is often most effective when evaluated as part of a broader conversation with a client’s accounting and tax advisors.
What Kind of Impact Can It Have?
Depending on the property type, asset mix, tax profile, and timing, accelerated depreciation may produce meaningful tax deferral and cash flow benefits.
Evaluating cost segregation early can help preserve documentation, support planning, and identify opportunities before they are overlooked.
Why IRR-Capstan?
IRR brings deep commercial real estate valuation knowledge, property-level perspective, and market insight. Capstan provides specialized tax and engineering expertise related to cost segregation studies.
Together, IRR and Capstan help clients evaluate opportunities, understand where value may exist, and move efficiently toward the next step with their accounting and tax teams.
Download Resources
- Cost Segregation Guide: A comprehensive overview of how cost segregation works, when to consider it, and how it may support broader tax planning.
- Cost Segregation 101 Overview: A shorter introductory piece for owners, investors, and developers evaluating whether a study may be worthwhile.
- Senior Living Facilities Overview: A sector-specific flyer showing how cost segregation may apply in senior living acquisition, renovation, and expansion scenarios.
- 179D Deduction Overview: A related resource covering the 179D deduction for qualifying energy-efficient construction and renovation projects.
Contact us to discuss whether your property or project may be a good candidate for cost segregation analysis.
