Cost segregation for office buildings
A plain office building is mostly shell and core, and the shell and core stay 39-year. The reclassification you can defend lives in the tenant fit-out and the low-voltage layer that a build-out drags along — so the number tracks how heavily the space was finished, not the square footage. Lightly built suites land near the bottom of a 12–35% modeled range; a full white-box-to-turnkey build-out reaches the top.
| Modeled reclass range | 12–35% |
|---|---|
| Typical study fee (Cost Seg Smart) | From $1,995 |
| Recovery periods captured | 5-, 7- and 15-year vs the 39-year shell |
| Delivery | Engineering-based; virtual or on-site depending on the provider |
1What reclassifies in a office buildings
In a office, cost segregation typically reclassifies 12–35% of depreciable basis out of the 39-year building shell into 5-, 7- and 15-year property. The components that recur:
| Component | Recovery period | Authority carried (with caveat) |
|---|---|---|
| Tenant improvements — carpet & resilient flooring, glass storefronts, demountable partitions, casework | 5- or 15-year | Removable finishes and partitions not integral to the structure may qualify as personal property depending on how they are attached and whether they are readily relocatable. |
| Structured data & low-voltage cabling — Cat-6/fiber backbone, patch panels, IDF/MDF racks | 5-year | Cabling serving workstation equipment may be treated as §1245 property depending on whether it is dedicated to the occupant's business rather than the building's operation. |
| Decorative & accent lighting — pendants, cove, feature-wall and reception lighting | 5-year | Lighting installed for décor or task branding rather than general building illumination may qualify depending on its function and whether general lighting exists independently. |
| Supplemental HVAC — server-room CRAC units, conference-room dedicated cooling | 5-year | Cooling dedicated to a specific tenant load rather than general comfort may be §1245 depending on whether it serves equipment or the building. |
| Parking lot, striping & landscaping — surface lot, curbs, site irrigation, plantings | 15-year | Site improvements are generally land improvements depending on their permanence and separation from the building footprint. |
| Signage & monument — exterior identification, wayfinding | 5- or 15-year | Signage classification depends on whether it is decorative/tenant-specific versus a permanently affixed site element. |
2Typical results and what drives the spread
Across standardized office configurations, the engine models an accelerated share of roughly 12–35%. Where a suite sits inside the 12–35% modeled range depends almost entirely on build-out intensity; a shell-condition lease-up sits low, a fully finished professional suite sits high. These are modeled ranges, not a promise for any specific building — see by the numbers.
3By the numbers (original data)
4What a study costs for this type
Study fees track building size, documentation quality and whether an on-site inspection is performed. Cost Seg Smart's own fee for this type starts at From $1,995 (published, pulled from its pricing system). See the pricing guide for current market bands; competitor fees are sourced there, not quoted in prose here.
5Provider comparison — the Top 5 for this asset class
Every provider below is scored on the same fixed rubric, weighting relevant office evidence most heavily. Facts are drawn from each provider's public materials and dated.
| Provider | Score* | Relevant office evidence | Profile | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Baker Tilly National accounting/advisory · National (Chicago, IL) Best for national on-site coverage Most transparent turnaround | 8.2How this score is built (sub-score ÷ 5 × weight):
| Dedicated page or article source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| RE Cost Seg Engineering-first · National (Houston, TX) Best published pricing Best for virtual delivery Most transparent turnaround | 7.9How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Cost Seg Smart site owner Engineering-first Best published pricing Best for virtual delivery | 7.8How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Duffy+Duffy Engineering-first · Midwest (Columbus/Cleveland, OH + Detroit) Best for national on-site coverage | 7.7How this score is built (sub-score ÷ 5 × weight):
| Dedicated page / named case study source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Source Advisors Engineering-first · National (Fort Worth, TX) Best for national on-site coverage | 7.3How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → |
Top 5 of 22 firms scored for office. See every firm's full profile and per-type standing in the provider directory.
*Score is this site's published rubric output (0–10) for office, weighting relevant property-type evidence most heavily (see how we compare) — click any score for its build-up. It is not a customer rating and no reviews are used. Cost Seg Smart is the site owner and is scored on the same rubric.
6Is it worth it — break-even
Because the shell dominates a plain office, the benefit generally clears a study fee once basis reaches the low seven figures, and earlier for a heavily built-out property or where bonus depreciation still applies to the eligible short-life basis.
7Frequently asked questions
Our office is basically an open floor plan with carpet — is a study still worth it?
It can be, but the reclass will sit toward the low end. With little dedicated cabling, no décor lighting, and no supplemental HVAC, most of the basis stays in the 39-year shell. Studies pay off best on offices with substantial tenant build-out or a sizable parking and landscaping envelope.
Does it matter whether we own the building or just improved a leased suite?
It matters for what you can depreciate. An owner segregates the whole building; a tenant segregates its own improvement basis. Either way the analysis of finishes, cabling, and supplemental systems is the same — it just runs against a different pool of costs.
Is our data cabling really 5-year property?
Cabling dedicated to workstation and network equipment may qualify as §1245 personal property, depending on whether it serves the occupant's business rather than the building itself. An engineer typically traces the runs to distinguish tenant cabling from base-building systems.
How does bonus depreciation change the answer for an office?
Bonus lets the eligible 5- and 15-year basis be written off faster in the placed-in-service year rather than spread out. It amplifies whatever short-life basis the study finds, so a modest office reclass can still produce a meaningful first-year deduction.
We renovated a suite for a new tenant — can those costs be segregated?
Generally yes. A tenant build-out is often short-life-rich — partitions, finishes, and cabling — and the improvement basis is exactly what a study examines. The classification depends on the facts of how each element is installed and whether it is removable.
Sources and authority consulted
- Rev. Proc. 87-56 (MACRS asset classes)
- IRS Cost Segregation Audit Techniques Guide (Pub 5653)
- Cost Seg Smart per-vertical component engine (modeled ranges + component authorities).
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