CRE Depreciation: Cost Seg, Bonus Depreciation, and Recapture Explained

Note: This episode is educational and does not constitute tax advice. Depreciation is one of the most important drivers of after-tax returns in commercial real estate, but it’s often misunderstood. In this episode of The Alkaline Reaction, Spencer Correnti breaks down what depreciation is, how it works, and why it matters in real deals. We cover the land vs. building rule, standard depreciation schedules, how cost segregation accelerates deductions, where bonus depreciation can create year-one expensing depending on “placed-in-service” timing, and how depreciation recapture impacts full-cycle outcomes at exit. The episode includes practical examples and case studies designed to help investors and operators understand depreciation as a strategic part of deal underwriting.