Why Drive-Up Storage Offers Cost Segregation Opportunities
Drive-up self-storage facilities feature extensive site improvements that qualify for accelerated depreciation. Paved driveways, access roads, and parking areas often represent 20-30% of total property cost and depreciate over 15 years rather than the 39-year commercial schedule. This single category frequently generates substantial first-year deductions.
The construction pattern of drive-up storage creates numerous reclassification opportunities. Individual unit roll-up doors, metal partition walls, and unit-specific electrical service are not permanent building structure and typically qualify for 5-year or 7-year depreciation.
Site improvements beyond paving also contribute to accelerated depreciation. Fencing, security gates, exterior lighting, signage, and landscaping all qualify as 15-year land improvements. For facilities on larger sites, these components add meaningful value to cost segregation studies.
Security infrastructure including cameras, access control systems, keypads, and monitoring equipment generally qualifies for 5-year depreciation. Modern drive-up facilities typically feature comprehensive security systems representing significant investment eligible for acceleration.
Key Components in Drive-Up Storage Cost Segregation
Paving and site work represent the largest land improvement category for drive-up facilities. Asphalt or concrete drives, curbing, drainage systems, and grading all qualify for 15-year depreciation. The extensive circulation requirements of drive-up storage make this category particularly significant.
Unit doors and hardware for individual storage units qualify for shorter recovery periods. Roll-up doors, latches, padlock hasps, and door frames are not permanent building structure. With hundreds of units, door costs accumulate to meaningful depreciation acceleration.
Perimeter security including fencing, gates, and access control equipment qualifies for accelerated depreciation. Chain-link fencing with privacy slats, automated gates, keypads, and intercom systems are typically classified as 15-year land improvements or 5-year personal property.
Electrical systems serving individual units and security equipment warrant examination. Unit lighting, convenience outlets, and security system wiring may be reclassified from building electrical. Dedicated circuits for gate operators and camera systems also qualify for shorter periods.
Maximizing Value from Drive-Up Storage Studies
Site-to-building ratio affects study outcomes. Drive-up facilities with larger sites relative to building area typically show higher percentages of accelerated depreciation. Understanding this relationship helps set realistic expectations for study results.
Phased developments require attention to placed-in-service timing. When facilities are built in phases, each phase has its own depreciation schedule. Studies conducted as phases complete capture benefits promptly rather than waiting for full project completion.
Renovation projects create additional opportunities. When you resurface paving, replace unit doors, or upgrade security systems, these improvements start fresh depreciation schedules. Supplemental studies on capital improvements often yield higher acceleration percentages than original construction.
Conversion properties from other uses may require different analysis. When warehouse, manufacturing, or other buildings are converted to drive-up storage, the conversion improvements are studied separately from the original structure. Understanding this distinction ensures proper depreciation treatment.
How Goodlane Group Supports Drive-Up Storage Owners
Goodlane Group connects drive-up self-storage owners with cost segregation firms experienced in this property type. Our network includes engineers who understand the unique construction patterns of drive-up facilities and how to maximize accelerated depreciation opportunities.
We provide preliminary estimates considering your facility size, site characteristics, and construction details. These estimates help you evaluate potential tax savings and make informed decisions about engaging full engineering studies.
Our team coordinates documentation gathering efficiently, working with your property managers and contractors to compile construction records, site plans, and cost information needed for accurate studies.
Beyond initial studies, Goodlane Group supports your ongoing storage portfolio needs. Whether expanding with new facilities, renovating existing properties, or planning sales, we help optimize tax outcomes at every stage of ownership.