Property Overview
- Property Type: Warehouse / Manufacturing
- Location: Corona, CA
- Year Acquired: 2025
- Year Built: 1991
- Building Size: 223,055 sq ft
- Total Depreciable Basis: $37,471,308.62
- Placed in Service: October 15, 2025
This engineering-based cost segregation study was performed on a large warehouse and manufacturing facility in Corona, California. ETS analyzed the building and site improvements to identify assets eligible for shorter depreciation lives and accelerate tax deductions.
Key Results
Asset Reclassification
- 5-Year Property: $5,168,110.56 — 13.79%
- 15-Year Property: $3,816,220.84 — 10.18%
- 39-Year Property: $28,486,977.25 — 76.03%
Total accelerated property (5-year + 15-year): $8,984,331.40
23.97% of the total depreciable basis was reclassified to shorter depreciation lives. The report’s cost segregation summary shows this reallocation across 5-year, 15-year, and 39-year property classes.
Immediate Tax Impact
Immediate Tax Benefit
$9,135,505
Projected 5-Year Tax Benefit
$12,788,682
By accelerating depreciation on nearly $9 million of building and site costs, this study created a substantial first-year tax benefit and significantly increased projected deductions over the first five years of ownership. The summary chart in the report presents both the immediate tax benefit and the projected five-year savings.
Depreciation Impact
Before Cost Segregation
Standard straight-line depreciation over 39 years.
After Cost Segregation
- $5,168,110.56 depreciated over 5 years
- $3,816,220.84 depreciated over 15 years
This shifts a meaningful portion of the property into shorter recovery periods, increasing early-year depreciation and improving near-term cash flow. The depreciation comparison shown in the report highlights the difference between the original treatment and the accelerated results after the study.
Examples of Accelerated Assets Identified
The engineering study identified a wide range of components that qualified for accelerated depreciation.
5-Year Assets
Examples of shorter-life assets identified in the study included:
- Dedicated HVAC mini split systems
- Warehouse lighting and dedicated outlets
- Telephone, television, and server/data connections
- Dedicated electrical equipment and panels
- Security cameras and related systems
- Specialized interior finishes and certain removable components
15-Year Land Improvements
Examples of site assets identified for 15-year treatment included:
- Asphalt paving
- Concrete paving and sidewalks
- Parking striping and wheel stops
- Curbs and site drainage elements
- Fencing and gates
- Site lighting, signage, bollards, and flagpole improvements
These are the types of assets that are often grouped into the building by default, but an engineering-based cost segregation study can properly identify and reclassify them into shorter depreciation categories.
Financial Takeaway
Property Basis:
$37,471,308.62
Accelerated Basis Identified:
$8,984,331.40
Immediate Tax Benefit:
$9,135,505
Projected 5-Year Benefit:
$12,788,682
For this Corona warehouse and manufacturing property, ETS identified nearly $9 million in accelerated basis and helped convert a standard depreciation schedule into a much stronger early-year tax position. With almost 24% of the depreciable basis moved into shorter-life categories, the study created a major opportunity to improve cash flow and recover costs faster.
