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Cost Segregation for Laboratories
Laboratory space is among the most system-intensive construction in commercial real estate. Fume hoods, lab casework, specialty gases, purified water, process exhaust and dedicated power are installed to serve the work done in the lab, and separating them from the building that houses them is what a laboratory study is for.
Where the value is in lab space
Engineering has completed studies for every commercial property type, from hotels to lumber mills.
- Research and development labs
- Clinical and testing labs
- Life science buildings
- Lab space within office or flex buildings
Lab systems serve the work
Specialty gas piping, vacuum and compressed air, purified water systems, acid waste lines and the dedicated power feeding instruments exist because of what happens in the lab. Where a system serves equipment or a process rather than the building, it is analyzed separately and the reasoning is documented.
Casework and fume hoods
Lab benches, fixed and movable casework, fume hoods, biosafety cabinet connections and the exhaust dedicated to them are distinct from the building's general mechanical systems, and they are classified individually.
Fit-outs and conversions
Labs are often built into office or flex shells, and they are renovated as programs change. Each fit-out is a study population, and lab infrastructure removed in a conversion can be written off through a partial asset disposition.
Commonly reclassified components
Representative of what an engineered study identifies in this asset class. Actual components and recovery periods depend on the property and are documented individually in your report.
What would a study find on your property?
Send the property details. Engineering prepares the estimate, and you receive a written, fixed-fee proposal within 24 to 48 hours.
Laboratories cost segregation questions
Still have a question? Ask Engineering.
Is laboratory space eligible for qualified production property?
Generally not. QPP under §168(n) is limited to nonresidential real property used as an integral part of manufacturing, production or refining, and space used for research activities is specifically excluded. Where a lab sits inside a production facility, how its space is treated depends on the facts, and the study documents it.
We lease lab space and paid for the fit-out. Can we do a study?
Yes, on the improvements you funded and own. Tenant-owned lab build-out is a legitimate study population, and labs carry more shorter-life systems than most tenant improvements. The lease determines who owns what, so we read it as part of the engagement.
How do you separate lab exhaust from building HVAC?
By what each system serves and how it was designed. Heating, ventilation and air conditioning for occupied space is a building system. Exhaust ducted from fume hoods or equipment is analyzed separately, using the mechanical drawings and the installation itself, and the report states the reasoning.
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