What is depreciation in commercial real estate?

Depreciation generally refers to the reduction in a property’s value over time due to physical wear, functional changes, or market influences. The term is also used in accounting and tax contexts, where it has a different meaning.

Because tax depreciation involves specialized rules, buyers should consult qualified tax professionals regarding how depreciation may apply to their individual circumstances.

If you’re evaluating commercial property, I’d be happy to discuss depreciation as one of many factors affecting long-term ownership.