Cost Seg Industrial

IOS List is an Excellent Resource for Commercial Real Estate News & Info

October 6, 2025 / John Murphy

Demand for Industrial Outdoor Storage (IOS) just continues at a rapid pace as more people look to acquire large parcels so they can store containers, trailers and trucks outside.

Typically these properties are a few acres in size depending upon what part of the country they are in. They have gravel or asphalt parking lots and secure fencing all around. We tend to see them in areas with lots of trucking, warehouses and supply chain operations.

I enjoy this site, IOS List, because they publish news in addition to just posting listings. Be sure to check them out!

If you own an Industrial Outdoor Storage property, it’s a good idea to take a look at doing cost segregation for your property. IOS properties are some of the highest performing properties when it comes to the ability to accelerate depreciation and take advantage of 100% bonus depreciation. If the property doesn’t have much for buildings then most of the cost basis will be 15 year class life which allows for accelerated depreciation. You might see a massive depreciation deduction in year one.

To me it’s a real headscratcher when people buy these properties and leave it untouched on their books as a 39 year asset when most of it is likely a 15 year asset. We can study that for a small fee and you can reap the tax benefits.

Cost Segregation for Small Bay Industrial Buildings

October 5, 2025 / John Murphy

Small bay industrial buildings are very hot property these days across the U.S. They work well because they are perfect for many small business owners especially those operating in the trades. Sometimes buildings like this are also call Flex Buildings.

Some have small office spaces but otherwise it’s a nice bay with maybe 1,000 – 2,500 SF of warehouse space. The ones I’ve seen also have a bathroom in each bay.

It doesn’t seem like there is a lot to these buildings and I will often get the question as to if these are worth studying or not. I will say that virtually every commercial building is worth studying if the basis is north of $200,000, if the owner is or expects to be profitable and if they purchased it with mostly new cash and debt. If they purchased the building 100% with 1031 exchange money, then that would need to be looked at to see if it would be worth studying or not. Carryover basis can qualify for acclerated depreciation but not bonus depreciation. That can impact the results of a study and it might be that it’s not worth the fee to do the study.

These properties will tend to have a small amount of 5 year class life property – maybe 3-8% max. The 15 year life can sometimes be sizable depending upon the driveways, parking etc. This will often be 10-15% and could be more. So many of these barebones small bay industrial / flex buildings will see 15-20% of the basis that can be accelerated.

If you have a $1,000,000 cost basis, that would be $150,000 – $200,000 in a depreciation expense in Year 1 or whatever year you decide to take this deduction by applying cost segregation.

I work all over the U.S. and help building owners, business owners and investors save money on their income taxes by doing cost segregation on their buildings. I work closely with many CPA firm and tax professionals around the county to get these studies done for their clients. We are responsive, accurate and have a long track record of 22 years in the business and more than 55,000 buildings studied. Our reports are easy to understand and apply to one’s taxes.

If you have a building or are considering buying or developing one, feel free to reach out and we can have a conversation. There’s no cost for us to talk. We can run an estimate at no-charge. There’s no obligation to do business with us. I’m here to help. If you’re on LinkedIn, let’s connect!

Demand for Industrial Real Estate Cools in 2025

September 23, 2025 / John Murphy

Industrial real estate is seeing a bit of a slowdown in demand according to NAIOP Industrial Space Demand Forecast. It’s an excellent article with lots of great data that I would encourage you to read it.

It appears the macro economic environment and trade policy are having an effect on the slight slowdown seen in this asset class.

South Carolina Manufacturing: 36% Output Surge, Yet 21% Jobs Vanish (2020–2024)

August 22, 2025 / John Murphy

SC Business News is reporting that manufacturing is getting a lot more efficient in the state of South Carolina based upon a new report issued by ETQ.

“The report revealed that South Carolina experienced a 21% decrease in manufacturing jobs from 2020 to 2024, while its real manufacturing GDP grew by 36%. South Carolina shed over 71,000 manufacturing jobs during that timeframe.”

I know we have certainly seen this play out as we regularly get news releases of companies announcing that they are spending a small fortune to open up new operations but I’m always surprise how few the number of employees are that they plan to add. Because of advanced manufacturing techniques and technology, we will build a lot more stuff but with only a fraction of the number of people.

Trump’s plan to bring manufacturing back to the states is great for GDP growth and some employment but it will not be the boost that it once was due to the advances in the manufacturing process for most industries.

Welcome to Cost Seg Industrial!

August 21, 2025 / John Murphy

Welcome to my new site! I have been publishing various blogs about real estate since 2006 – so nearly 20 years! Several years ago I started the successful blog called Cost Seg Building. I have published lots of information there pertaining to commercial real estate and the tax benefits associated with doing cost segregation.

As America looks to reindustrialize the nation and reshore all kinds of manufacturing, I thought it would be fun to dedicate a site to covering the topic of industrial real estate and cost segregation.

I have studied many industrial buildings as part of my work doing cost segregation and these buildings are all over the U.S. Some are the most complicated, intricate and expensive buildings ever built in the U.S. and others can be very simple metal, flex buildings that don’t cost much. But the point is, all of these buildings can be studied for tax savings. There are lots of misnomers about what’s a good building for cost segregation. The fact is they are ALL good buildings for cost segregation.

One of the topics I plan to cover here at Cost Seg Industrial is the new category of property that President Trump has been discussing and that got passed in the One Big Beautiful Bill is Qualified Production Property. This is a new asset classification whereby the entire building can be depreciated in year one if it’s part of the manufacturing process. There is a lot to this and we expect the IRS will be issuing updates and guidance soon. Let’s say you build a new $50MM facility to manufacture something. You have a large industrial space but then a few thousand square feet of office space as well as land improvements. It’s just the space that is immediately tied to the manufacturing of the product that you get to depreciate in year one. That’s going to be a massive deduction but it must be segregated from the other types of property or assets that you have on this property. So the building will need a cost segregation study by a reputable firm. So maybe you end up with $35 – $40MM as the deduction on this. It’s still massive.

Anyway, I look forward to connecting and providing those of you connected and involved with industrial real estate with the information you need to understand how you can further massive value and cash flow out of your buildings by doing cost segregation. Connect with me here…LinkedIn, Twitter, YouTube etc.