Maximizing OBBBA benefits
The One Big Beautiful Bill Act (OBBBA) offers powerful incentives for manufacturers and production owner-users to modernize facilities and equipment. These provisions can dramatically reduce upfront costs and improve cash flow.
Why it matters
- Encourages reshoring and modernization of U.S. manufacturing.
- Significant first-year tax savings through accelerated depreciation.
- Applies to new builds, renovations, and equipment purchases.
View our webinar recording on the recently signed One Big Beautiful Bill Act (OBBBA) and its implications for industrial real estate and domestic manufacturing.
Key incentives
Bonus depreciation
Permits the immediate write-off, of a percentage of the cost, of eligible personal property and land improvements in the year it was placed in service.
Eligibility: Qualifying assets must have a MACRS class life of 20 years or less.
Personal property (5–or 7–year)
- Machinery and production equipment
- Robotics and automation systems
- Conveyor lines, sorters
- Forklifts, pallet jacks, racks
- Tools and molds
- IT hardware, servers
- Dedicated outlets
Land improvements (15–year)
- Paving (parking lots, truck yards)
- Fencing
- Security gates
- Landscaping
- Retaining walls
- Site lighting
Timing: 100% bonus depreciation applies for property placed in service after Jan 20, 2025.
Qualified improvement property (QIP)
Permits the immediate write-off, of a percentage of the cost, of any improvement to an interior portion of a building (not structural, not expanding the footprint) in the year it was placed in service.
Eligibility
- Applies to nonresidential real property so long as the improvement was placed in service after the date the building was first placed in service by any taxpayer.
- A cost segregation study is needed to identify and quantify QIP.
Timing: 100% bonus depreciation applies, ideal for warehouse-to-factory conversions.
Qualified production property (QPP)
Permits the immediate write-off on a portion of any U.S. nonresidential real property that is originally used by the taxpayer as an integral part of a qualified production activity (manufacturing/ producing/ refining into a qualified product) in the year it was placed in service.
Eligibility: Must be originally used by the taxpayer for production and cannot have been used for production between Jan 20, 2021, and Jan 19, 2025.
Urgency to act now
QPP-eligible
- HVAC
- Electrical
- Plumbing (main supply, drain lines)
- Permanently affixed fire systems
- Built-in conveyor systems
- Built-in cranes or hoists
- Paved truck aprons
Not QPP-eligible
- Office space
- Sales or customer service areas
- Data centers
- Distribution Centers
- Parking
- Decorative landscaping
- Unrelated storage
Timing: 100% expensing is available for projects that break ground by Jan 1, 2029, and are placed in service by Jan 1, 2031.
Urgency to act now
- Retroactive head start applies to projects breaking ground after Jan 21, 2025.
- Current contractor capacity and equipment availability will tighten as adoption accelerates.
- About 18 months to secure sites and finalize plans before timelines become restrictive.
Advisors in action
With tax rules rewritten to incentivize U.S. facility investment, producers need more than space; they need a real estate partner who understands how to unlock value through location strategy and execution. Our teams collaborate nationally and locally to help extract the full value of the OBBBA.
- Facility planning and operational benchmarking
- Property acquisition, land assemblage, and build-to-suit representation
- Site selection and location strategy
- Lease vs. own modeling
- Development, project, and construction management services
- Sale-leaseback advisory to convert equity into growth capital
- Portfolio optimization and repositioning
- Disposition guidance on non-core asset
This content is for informational purposes only and does not constitute tax, legal, or financial advice. Avison Young and its representatives are not tax advisors. Please consult a qualified tax professional regarding your specific situation.
Need some help navigating OBBBA benefits? We’d be happy to answer your questions. Give us a call.
Peter Kroner
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- Director, National Industrial, Market Intelligence
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- Industrial
- Strategic Business Advisory
- Market Intelligence
