Cost Segregation on a $1.5M Industrial / Warehouse: $191,250 in Accelerated Depreciation

A $1.5M industrial property offers significant cost segregation value from site improvements, specialized mechanical systems, and heavy-duty building components.

$191,250 Accelerated Depreciation

$70,762 Est. Year-1 Tax Savings

47x Return on Study Cost

Adjust Your Numbers

Property Type

Purchase Price

$70,762

Estimated Year-1 Tax Savings

$191,250

Accelerated Deductions

$1,495

Study Cost

47x

ROI on Study

Get My Full Study →

Estimates are for illustration only. Details

What This Means for a $1,500,000 Industrial / Warehouse

$1,500,000 Industrial / Warehouse property — cost segregation depreciation example

An industrial property purchased for $1,500,000 has a depreciable basis of approximately $1,125,000 (75% after the 25% commercial land allocation). Industrial buildings depreciate over 39 years by default, but cost segregation reclassifies $191,250 into shorter MACRS classes. The 15-year category is particularly significant for industrial properties: site paving, loading docks, fencing, outdoor lighting, drainage systems, and yard improvements often represent a substantial share of the reclassified total.

Under 100% bonus depreciation, the full $191,250 is deductible in year one, generating $70,762 in federal tax savings at the 37% rate. The study costs $2,995, producing a 24x return. Actual results depend on the building's finish level, age, and the ratio of office space to warehouse or manufacturing area.

Industrial cost segregation results are sensitive to the building's finish score — a measure of interior buildout quality. A basic warehouse with minimal office space will have a different component mix than a flex industrial building with 30% office and climate-controlled storage. Properties with higher finish levels produce more 5-year personal property reclassification, while heavy site improvement properties produce more 15-year reclassification.

MACRS Depreciation Breakdown

Accelerated Depreciation by MACRS Class

$191,250 total reclassified into shorter recovery periods

5-Year Property $66,938

35%

7-Year Property $19,125

10%

15-Year Property $105,187

55%

Estimated Year-1 Tax Savings $70,762

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

Method

Year-1 Deduction

Difference

Standard (39yr straight-line)

$28,846

—

With Cost Segregation + Bonus

$191,250

+$162,404

Estimated deduction based on typical cost segregation allocations for industrial / warehouse properties. Actual study results may vary based on property-specific analysis including age, condition, renovations, and local construction costs.

Get $100 off your study

Enter your email — we'll send your savings breakdown + a $100 discount code.

Why Cost Segregation Works for Industrial Properties

Industrial and warehouse properties have a distinctive cost segregation profile driven by heavy site work and specialized building systems. The 15-year MACRS class is typically the largest accelerated component: truck courts, loading docks, heavy-duty paving, fencing and security systems, rail spurs, exterior lighting, and stormwater infrastructure can represent a significant share of the depreciable basis.

The 5-year and 7-year classes capture interior components: overhead cranes, dock levelers, specialized electrical distribution, compressed air systems, fire suppression beyond code minimum, and office buildout within the industrial space. The ratio of 5-year to 15-year property is inverted compared to residential — industrial typically has more site work than personal property.

With 100% bonus depreciation, the full reclassified amount is deductible in year one. Industrial properties depreciate over 39 years by default, so the acceleration from cost segregation is proportionally greater than for residential assets.

Who This Example Applies To

Industrial and warehouse property investors
Distribution center and logistics facility owners
Manufacturing facility investors with specialized buildouts
Investors acquiring industrial assets with significant site improvements

Industrial reclassification rates vary significantly based on site improvement scope, building finish level, and specialized equipment. Shell-condition warehouses have lower rates than fully built-out distribution centers. Basis assumes 25% land allocation.

See what this looks like for your property

Get a professional cost segregation study with your exact depreciation breakdown. Starting at $495.

Get My Full Study →

Money-Back Guarantee Full refund if the study doesn't save you money

See a Sample Download sample report

Compare: $1,500,000 Across Property Types

Property Type	Accelerated	Tax Savings	Study Cost	ROI
Airbnb / Short-Term Rental	$360,000	$133,200	$1,195	111x
Rental Property	$240,000	$88,800	$1,195	74x
Industrial / Warehouse	$191,250	$70,762	$1,495	47x

Frequently Asked Questions

What is a cost segregation study? ▼

A cost segregation study is an engineering-based analysis that reclassifies components of your property into shorter IRS depreciation categories (5, 7, and 15 years) instead of the default 27.5 or 39 years. This accelerates your depreciation deductions, reducing your tax bill in the early years of ownership.

Why is cost segregation more impactful for commercial properties? ▼

Commercial properties depreciate over 39 years by default — 42% longer than the 27.5-year residential schedule. This means cost segregation provides proportionally greater acceleration: reclassifying components from 39 years to 5 years represents a 34-year speedup, compared to a 22.5-year speedup for residential properties.

How long does a cost segregation study take? ▼

Our studies are delivered in 3-5 business days. You provide the property address, purchase price, and closing date — we handle everything else using assessor records, satellite imagery, and construction cost databases. No site visit or tenant disruption required.