Overview
A 425,000 SF modern distribution center in Columbus. Multiple loading docks, cross-dock layout, 32-foot clear height. 2020 construction. Acquired for $32,000,000 in 2024.
The Cost Seg Smart engineered analysis identifies $5,780,657 in accelerated bucket components (20.7% of the $27,891,200 depreciable basis after a 12.8% land valuation).
What the analysis identifies
The 425,000 SF property carries the component density typical for a modern distribution center. The component inventory pulls the following share into accelerated buckets:
- office buildout within the industrial building (carpet, partitions, dedicated office HVAC)
- specialty MEP for industrial operations (compressed air systems, specialty exhaust, process plumbing)
- the truck court (the largest 15-year line in most industrial), trailer parking, fenced yard, site lighting
- specialty electrical for production equipment, building security and CCTV systems
- dock equipment (dock seals, levelers, bumpers — varies in classification depending on permanence)
Item-level engineering documentation supports each classification — photographs of mounting details, mechanical schematics for HVAC and plumbing classifications, electrical schedules for dedicated-circuit identification.
Reclass breakdown
| Bucket | Amount | % of basis | MACRS section |
|---|---|---|---|
| 5-year personal property | $1,922,547 | 6.9% | Section 168(e)(3)(B); Section 1245 |
| 7-year specialty | $192,039 | 0.7% | Section 168(e)(3)(C); Section 1245 |
| 15-year land improvements | $3,666,072 | 13.1% | Section 168(e)(3)(E); Section 1250 |
| 39-year structural | $22,110,543 | 79.3% | Section 168(c); Section 1250 |
| Total depreciable basis | $27,891,200 | 100% |
Land value (excluded from depreciable basis): $4,108,800 (12.8% land allocation, Columbus OH market).
Year-1 federal tax savings
Assuming 100% bonus depreciation per the One Big Beautiful Bill Act (OBBBA, 2025), the full accelerated bucket components are deductible in year 1:
- Accelerated bucket total: $5,780,657
- Federal tax savings at 37% top bracket: $2,138,843
For a passive investor, the deduction creates a passive loss offsetting passive income. For a taxpayer qualifying as a real estate professional under Section 469(c)(7), the deduction offsets active income — including business operating income from non-real-estate sources.
Methodology applied
The engine applied the following parameters:
- Era profile: 2020 build, finish density and component weights calibrated to construction-era patterns
- Geo factor: 0.85 (Columbus MSA, metro calibrated)
- Component count: 41 distinct line items in the inventory
- Indirect cost multiplier: 1.25 (standard 25% indirect uplift covering soft costs, contingency)
- PPI multiplier: 1.04 (BLS construction cost index applied from build year to acquisition year)
- QC status: PASS (engineered analysis cleared all 16 quality-control checks)
The land valuation used the statistical source. Properties where the county assessor record is within reliability tolerances may produce a different land allocation; the engineered methodology applies the most defensible source available.
Audit considerations specific to this property
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Office vs warehouse split: The office portion of an industrial building reclassifies differently than the warehouse portion. The engineering documentation establishes the square footage split and applies component weights separately.
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Truck court paving: The truck court is 15-year land improvement. The audit verifies the cost allocation against site work line items. Trailer parking and fenced yard areas follow the same classification.
-
Dock equipment classification: Dock seals, levelers, and bumpers are typically 5-year equipment. Structural dock components (door tracks, structural openings, dock walls) are 39-year. The engineering schedule distinguishes.
Return profile
| Metric | Value |
|---|---|
| Study cost (typical) | $10000–18000 |
| Year-1 federal tax savings (37% bracket, 100% bonus) | $2,138,843 |
| Year-1 ROI on study fee | 119×–214× |
| Total accelerated depreciation pulled forward | $5,780,657 |
The ROI calculation reflects gross year-1 tax savings against the typical study cost range. Net present value of the strategy depends on hold period (longer holds capture more time value) and recapture treatment at sale.
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