Understanding Common Area Components
Office building common areas include lobbies, corridors, restrooms, elevator banks, and amenity spaces shared by all tenants. These areas often contain premium finishes and specialized improvements that qualify for accelerated depreciation through cost segregation.
Lobby improvements in quality office buildings may include stone flooring, decorative wall treatments, custom lighting, and specialty millwork. These components typically qualify for 5-year to 15-year depreciation rather than 39-year building treatment.
Building amenities increasingly important for tenant attraction—fitness centers, conference facilities, rooftop terraces—contain furniture, fixtures, and equipment qualifying for accelerated depreciation. The investment in these amenity spaces creates concentrated cost segregation opportunities.
Restroom finishes and fixtures throughout a building represent repeated improvement patterns. Quality restroom renovations with upgraded finishes generate accelerated depreciation that multiplies across multiple floors.
Allocating Costs Between Common and Tenant Areas
Building systems serving both common areas and tenant spaces require allocation for cost segregation purposes. HVAC equipment, electrical systems, and plumbing may serve proportional allocation based on area, capacity, or other reasonable methodology.
Vertical transportation systems require analysis beyond simple area allocation. Elevator equipment, cab interiors, and controls serve the entire building but may include components qualifying for different depreciation treatment than the structural installation.
Life safety and security systems typically serve entire buildings rather than specific areas. Fire suppression, emergency lighting, and access control systems should be analyzed holistically with appropriate allocation methodology.
Parking facilities serving office buildings require separate analysis. Whether structured or surface parking, these areas contain land improvements and equipment qualifying for accelerated depreciation independent of building allocation.
Common Area Improvement Timing
Lobby and common area renovations create new cost segregation opportunities separate from original building construction. Updated finishes and new furnishings start fresh depreciation schedules and may qualify for current bonus depreciation percentages.
Amenity additions to existing buildings represent capital improvements for cost segregation analysis. New fitness centers, conference facilities, or tenant lounges generate accelerated depreciation on the improvement cost.
Restroom renovations throughout a building create systematic improvement opportunities. When planning phased restroom upgrades, cost segregation analysis of each phase captures benefits as improvements are placed in service.
Building repositioning projects often focus on common area upgrades to attract new tenants. These substantial investments warrant detailed cost segregation analysis to maximize tax benefits from repositioning expenditures.
How Goodlane Group Supports Common Area Analysis
Goodlane Group helps office building owners identify and value common area components for cost segregation. Our network includes firms experienced in analyzing premium common areas typical of quality office buildings.
We provide preliminary estimates considering your building's common area finish level and amenity investments. Properties with substantial common area improvements typically yield higher accelerated depreciation percentages.
Our team coordinates documentation gathering for common areas that may be maintained differently than tenant space records. Building-level information complements tenant improvement records for comprehensive analysis.
Beyond initial studies, Goodlane Group supports common area renovation planning. Understanding depreciation implications helps prioritize improvements and time expenditures for maximum tax benefit.