Lee Connections: Unlock Hidden Tax Savings For Your Commercial Property
Big News for Commercial Property Owners:
New Legislation Supercharges Cost Segregation Benefits
July 10, 2025
A major legislative win for property owners includes provisions that significantly amplifies the benefits of Cost Segregation for commercial real estate owners.
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law, marking a significant shift in U.S. tax policy. Among its many provisions, the law permanently reinstates 100% bonus depreciation for qualified property placed in service after January 19, 2025 .
This change allows commercial real estate owners to fully deduct the cost of eligible assets in the first year, rather than depreciating them over several decades. For owners of retail, office, multifamily, and industrial properties, this presents a substantial opportunity to enhance cash flow and reduce tax liabilities.
The reinstatement of 100% bonus depreciation significantly amplifies the benefits of cost segregation studies. By identifying and reclassifying components of a building into shorter depreciation schedules—typically 5, 7, or 15 years—property owners can now fully expense these components in the first year . This strategy not only accelerates tax deductions but also improves return on investment.
As experts in commercial real estate, our team at Lee & Associates South Florida is committed to helping our clients take full advantage of opportunities like this by connecting them with trusted Cost Segregation specialists. Read on to learn how this strategy works—and why it may be the right time to act.
What Is Cost Segregation?
Cost Segregation is the process of reclassifying a property’s components into shorter depreciation categories—5, 7, or 15 years—instead of the traditional 39-year schedule used for commercial buildings. By accelerating depreciation, property owners reduce their taxable income, resulting in significantly increased cash flow.
For example, instead of deducting $102,565 per year on a $4 million building, a Cost Segregation study could unlock over $1 million in first-year depreciation when combined with bonus depreciation provisions, potentially generating $390,000 or more in tax savings in Year 1 alone.
Key Benefits of Cost Segregation
- Massive Tax Savings: Expect tax deductions of $60,000 to $100,000 for every $1 million in building cost within the first five years.
- Does Not Trigger Audits: When performed correctly, these studies do not raise audit flags.
- No Return Amendments Required: Studies can often be implemented without altering your previously filed returns.
- Works on Many Property Types: Ideal for office buildings, retail centers, restaurants, industrial properties, and even short-term rentals if they meet IRS qualifications.
- Strategic Compliance with New Tax Regulations: Under the latest Tangible Property Regulations, Cost Segregation has become the “certain method” to ensure correct depreciation and capitalize on new safe harbors for repairs and partial asset dispositions.
Who Qualifies
Cost Segregation isn’t just for large institutional investors. It’s frequently used for properties with a basis as low as $200,000, whether newly constructed, recently purchased, or owned for years. From garden-style apartments to retail strips, professional offices, hotels, and even warehouses, many asset types can benefit.
If you’re unsure whether your building qualifies, a complimentary estimate from a trusted specialist can provide clarity—with no obligation.
HOW LEE & ASSOCIATES SOUTH FLORIDA CAN HELP
Our commercial real estate brokerage team goes beyond the transaction. We help clients build long-term value in their properties. Through our network of vetted professionals—including engineers and tax consultants who specialize in engineered-based Cost Segregation studies—we facilitate:
- Free preliminary evaluations to determine potential tax savings
- Referrals to licensed, reputable service providers
- Property-specific strategies that align with your investment goals
We make it easy for you to understand the ROI and unlock benefits that could otherwise go unnoticed.
See How Much You Could Save - Get a Free Cost Segregation Estimate
About Lee & Associates South Florida
Lee & Associates South Florida is a fully vertical commercial real estate brokerage firm focused on industrial, office, retail, multifamily, investment and land sectors. Our dedicated team of professionals is led by Matthew Rotolante, CCIM, SIOR a 4th generation South Florida native in a family that has owned and operated commercial property here since 1928. Lee & Associates is the largest agent owned brokerage in the nation with Senior Agent’s ability to earn profit share resulting in the highest splits while still receiving full resources, support and leads from our national network. Our collaborative and cheerful culture allows for open communications throughout the company, fostering the sharing of information and best practices to better enable client decision making. The Lee & Associates’ robust national network that sold and leased over $120 Billion in the last 5 years offers clients a cross-market platform of expertise and deal opportunities across all asset specialties and representation roles. For the latest news from Lee & Associates South Florida, visit leesouthflorida.com or follow us on Facebook, LinkedIn, Twitter and Instagram, our company local news.
About Lee & Associates
Lee & Associates is a commercial real estate brokerage sales, leasing and management firm. Established in 1979, Lee & Associates has grown its service platform to include over 75 offices in the United States and Canada. Lee & Associates is the largest agent owned commercial real estate brokerage where agents get the greatest return for their efforts and hence are more committed and better enabled to provide superior results for their customers. For the latest news from Lee & Associates, visit lee-associates.com or follow us on Facebook, LinkedIn, Twitter and Link, our company blog.