Downtown Office Tower – Los Angeles, CA


A real estate investor exploring strategic tax planning for a Class A office tower in downtown Los Angeles wanted to understand the impact of a cost segregation study before making upgrades to the property. The building was fully leased by professional services firms, and the owner sought to reduce current tax liability and improve short-term cash flow to fund future improvements.

Property Type: Class A Office Tower
Estimated Property Value: $25 Million
Size: 200,000 sq. ft.
Service Modeled: Cost Segregation Study

What We Modeled


In this scenario, a full engineering-based cost segregation analysis was applied. Assets like decorative interior lighting, customized tenant finishes, high-efficiency HVAC systems, and advanced security components were identified for accelerated depreciation. The reclassification followed IRS guidelines to maximize front-loaded deductions.

Potential Impact


If applied to a property of this scale and composition, the modeled cost segregation analysis could result in significant short-term tax advantages. The ability to accelerate depreciation on qualifying components would allow the property owner to unlock tax deferrals and fund near-term upgrades without impacting existing capital reserves.

Reclassified Assets: $7 million
First-Year Tax Savings: $2 million
Estimated First-Year Deductions: $2.3M–$2.8M

Disclaimer: This scenario is a hypothetical example for illustrative purposes only and does not represent actual client results. Consult with our team for a formal evaluation tailored to your property.

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