Office building owners and tenants are constantly seeking ways to maximize their return on investment and free up capital for growth. Cost segregation is a proven tax strategy that can significantly accelerate depreciation deductions, improve cash flow, and help you reinvest in your business. Here’s how this approach applies uniquely to office spaces and tenant improvements, and how Acena Consulting’s proactive, responsive, and impactful service set us apart in delivering these benefits.
Office buildings are complex assets, often featuring a blend of structural elements and specialized improvements tailored to tenants’ needs. Traditionally, the entire property would be depreciated over 39 years, but many components, such as lighting, flooring, partitions, and specific HVAC systems, can qualify for much shorter depreciation periods (5, 7, or 15 years) when properly identified and classified through a cost segregation study.
Tenant improvements are especially common in office buildings, allowing spaces to be customized for new occupants. The IRS recognizes many of these improvements as Qualified Improvement Property, which can be depreciated over 15 years and may be eligible for bonus depreciation, allowing for substantial first-year deductions. Examples of depreciable tenant improvements include:
Interior walls and partitions
Upgraded lighting and electrical systems
Specialized flooring and finishes
Non-structural HVAC enhancements
This accelerated depreciation dramatically reduces taxable income, freeing up capital for reinvestment or operational needs.
Acena Consulting stands out in the cost segregation industry by delivering on a proven process that directly benefits office building owners and tenants:
Efficient, Defensible Process: Acena’s engineering-based analysis and onsite verification ensure that every eligible asset is identified and classified according to IRS guidelines, resulting in a strong, audit-ready study completed with minimal disruption to your business.
Maximized Tax Benefits: Our process is designed to uncover every possible opportunity for accelerated depreciation, maximizing your tax savings and cash flow.
Collaborative, Transparent Service: Acena’s team works closely with your accounting professionals, providing clear communication and detailed reporting throughout the process, so you always know the status and impact of your study.
Entrepreneurial Mindset: Acena’s mission is to help innovative businesses unlock capital for growth by leveraging complex tax incentives, including cost segregation and related credits. Our approach is proactive and tailored to the needs of entrepreneurs and real estate investors.
Compliance and Quality: Meeting all 13 IRS requirements for a quality cost segregation study, our process is both thorough and defensible, ensuring you receive the full benefit of available tax incentives while minimizing audit risk.
Clients working with us have seen substantial tax savings and improved cash flow by leveraging cost segregation for office buildings and tenant improvements. By reclassifying eligible assets and improvements, owners and tenants can often realize significant first-year deductions, sometimes amounting to hundreds of thousands or even millions of dollars, depending on the size and scope of the property.
Cost segregation is a powerful strategy for office building owners and tenants looking to boost their bottom line, especially when tenant improvements are involved. With Acena Consulting’s efficient, defensible process and commitment to maximizing client value, you can confidently accelerate depreciation, unlock tax savings, and reinvest in your business’s future. If you’re considering a cost segregation study, Acena’s collaborative and expert-driven approach ensures you get the most out of your office property investment.
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Edited by Randy Eickhoff, CPA, Founder & Head Coach at Acena Consulting. Photo courtesy of kjarrett on Flickr.