Criterium-Cromer Engineers provides engineering-based cost segregation studies for commercial properties throughout Florida. A cost segregation study is a technical analysis used to accelerate depreciation, improve cash flow, and enhance the financial performance of income-producing real estate.
When performed by licensed engineers with construction expertise, a Florida cost segregation study provides defensible tax support while aligning with broader due diligence and capital planning efforts.
Cost Segregation as Part of Commercial Due Diligence
A thorough understanding of a commercial property is built on three complementary evaluations:
A Property Condition Assessment (PCA) evaluates the current physical condition of the building and identifies deficiencies and risks.
A Capital Needs Assessment (CNA) projects long-term repair and replacement costs for budgeting and reserve planning.
A Cost Segregation Study analyzes the building and site to identify components eligible for accelerated depreciation under IRS guidelines.
Together, these services provide owners, investors, and lenders with a complete picture of physical condition, long-term obligations, and tax performance.
What a Florida Cost Segregation Study Does
Under standard depreciation rules, commercial buildings are typically depreciated over 39 years, or 27.5 years for residential rental property. Land improvements are generally depreciated over 15 years.
A cost segregation study identifies qualifying components within the building and site that may be depreciated over shorter recovery periods, commonly 5, 7, or 15 years. These components often include interior finishes, specialty systems, equipment, and site improvements that are distinct from the primary building structure.
Because many Florida commercial properties are held for 10 years or less, accelerating depreciation can unlock significant near-term tax benefits.
Financial Impact for Florida Property Owners
A properly executed cost segregation study can materially improve project economics. Benefits may include improved cash flow through accelerated depreciation, enhanced internal rate of return, and stronger underwriting support for acquisitions and refinancing.
In many cases, a Florida cost segregation study can allow owners to recover 20 to 30 percent of a building’s depreciable basis during the accelerated depreciation period, depending on property type, age, and construction characteristics.
These tax savings are real cash benefits that may be used for reinvestment, capital reserves, or debt service.
Why Engineering-Based Cost Segregation Matters
The IRS has long recognized that cost segregation studies prepared by qualified construction and engineering professionals carry greater credibility than studies performed without engineering expertise.
Our Florida cost segregation services are grounded in:
- On-site inspections performed by licensed Professional Engineers
- Component-level analysis based on actual construction methods
- Engineering judgment applied to classification and cost allocation
- Clear documentation suitable for audit support
Unlike accounting-only approaches, our engineers understand how buildings are designed, built, and maintained, and how those details affect depreciation treatment.
Integrated PCA, CNA, and Cost Segregation Services
When a Property Condition Assessment, Capital Needs Assessment, and Cost Segregation Study are performed together, a single site visit can often support all three analyses.
This integrated approach reduces redundant inspections, improves consistency across reports, and is frequently more cost-effective for Florida commercial property owners and investors.
Who Benefits from Cost Segregation Studies
Florida cost segregation studies are commonly used by commercial property owners, real estate investors, developers, lenders, and tax advisors seeking to improve cash flow and deal feasibility.
They are particularly valuable for acquisitions, refinancing, newly constructed properties, major renovations, and properties with complex building systems.
Talk With a Florida Engineer
If you are unsure whether a cost segregation study is appropriate for your Florida commercial property, we recommend discussing it with an engineer early in the process: Talk to an Engineer
Criterium-Cromer Engineers can help determine whether your property is a good candidate, how cost segregation fits with PCA or CNA services, and the most efficient way to structure the analysis.