Building Types | Cost Segregation

Grocery Stores

In the fast-paced grocery retail landscape, every aisle, checkout counter, and cooling system is not just a necessity for operations but a hidden treasure trove of fiscal potential. The variety of assets—from specialized refrigeration units to shelving systems and POS terminals—each comes with its unique depreciation schedule.

Cost segregation becomes an invaluable tool for grocery store owners, allowing them to untangle this complex web of assets and maximize their tax deductions. By doing so, they not only boost their bottom line but free up capital for reinvestment in inventory, technology, and customer experience enhancements.

Cost Segregation for Grocery Stores

Grocery stores are more than just points of commerce; they’re intricate ecosystems with numerous fiscal opportunities lying beneath their aisles and counters. Uncover the potential for remarkable tax savings through the specialized systems and components that make each grocery store unique.

Modern grocery stores are veritable emporiums featuring departments like bakeries, delis, seafood counters, floral sections, and more. Each department comes with its own specialized electrical, plumbing, and exhausting systems, making them ripe for cost segregation analysis.

From sub-floor cooling trenches in produce aisles to complex cabling systems for point-of-sale units, grocery stores often incorporate state-of-the-art technologies that qualify for accelerated depreciation.

For stores that have HVAC units specifically tailored to meet the unique temperature and humidity requirements of their walk-in freezers and coolers, portions of the HVAC system may be considered personal property, opening doors to additional cost segregation benefits.

Large parking lots with extensive lighting and other site improvements also present opportunities for accelerated depreciation, contributing to your store’s overall financial outlook.

Substantial Savings Potential

Typically, you can accelerate depreciation on 18% to 36% of the capitalized costs. The scope of these benefits varies depending on your store type, cooling complexity, departmental range, and site improvements.

Don’t let these hidden financial gems lie undiscovered in your grocery store’s inventory and infrastructure. Seize the cost segregation opportunities today and redeploy the savings into enhancing your store’s offerings, customer experience, or operational efficiency. Whether you’re operating a small community market or a sprawling regional destination, the possibilities for reaping financial benefits are abundant.

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Take Advantage of Cost Segregation with Source Advisors

Cost segregation is a strategic approach for grocery store owners looking to optimize their tax benefits and improve their bottom line. By appropriately leveraging this strategy, property owners can significantly enhance their cash flow, ensuring they have the resources to maintain, upgrade, or expand their properties, ultimately maximizing their return on investment. Before embarking on a cost segregation study, it’s advisable to consult with professionals who have experience in both the real estate and tax sectors to ensure compliance and optimization.

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Grocery Store
Case Study

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Highlights in
the Case Study

This high-end grocery store is 48,000 square feet with $18,000,000 in construction cost.