NAREIT Backs Bill to Cut Depreciable Life of Improvements

WASHINGTON, DC-The National Association of Real Estate Investment Trusts says it backs Florida Republican US Rep. Shaw’s effort to shorten to 10 years the depreciable life of tenant improvements. Shaw and 64 co-sponsors introduced the bill, H.R. 1030, on Ma. 14. The House Ways and Means Committee is now considering the bill.

NAREIT president Steven A. Wechsler says cutting the depreciation limits from 39 to 10 years would let property owners better adapt to the needs of their tenants. According to Wechsler, NAREIT’s president and CEO, commercial leases now average less than a single decade, not four decades.

“Shortening the cost recovery period to match the actual life span of the improvements makes more sense economically,” he says. “Small businesses, in particular, would benefit because they tend to turn over rental space more frequently than large companies.”