Congress passed the One Big Beautiful Bill Act (H.R. 1) on July 4, 2025. Beyond the headlines, several tax changes touch industrial real estate directly—some immediately, others on a timeline.

First, 100% bonus depreciation is back for good on qualifying business property. If you acquire property after January 19, 2025 and place it in service, you can generally deduct the full cost in year one. That’s a big deal for equipment and many interior build-outs that support manufacturing and distribution.

There’s also a new incentive aimed squarely at companies that make things in the U.S. A fresh “qualified production property” rule lets owner-operators deduct 100% of the production portion of a new manufacturing building in the first year—if construction starts after January 19, 2025 and before January 1, 2029, and the facility is in service by January 1, 2031. Important fine print: offices and other non-production areas don’t count, and pure landlords generally can’t claim this by relying on a tenant’s use. There’s a 10-year recapture window if the building stops being used for production. If you’re considering an owner-occupied plant in Ohio, this is a powerful lever.

For landlords and tenants improving existing space, Section 179 expensing got bigger. You can now expense up to $2.5 million of qualifying improvements, with a phase-out beginning at $4 million (indexed after 2025). Think tenant build-outs, docks, and targeted capital upgrades that speed move-ins and reduce downtime.

Pass-through owners asked whether the small-business (Section 199A) deduction rose from 20% to 23%. It didn’t. The law makes the deduction permanent at 20% and adjusts some thresholds and mechanics, but it does not raise the headline rate.

One change that may reshape site planning: Opportunity Zones were made permanent, with a periodic re-designation process starting in 2026. That opens a longer runway to assemble land and phase projects in qualified areas around Central and Northeast Ohio, with more transparency coming as Treasury refreshes the map.

A caution for owners looking to modernize older assets: the energy-efficient commercial buildings deduction (Section 179D) is now scheduled to end for projects that begin construction after June 30, 2026. If you’ve been weighing major envelope, HVAC, or lighting work, the timeline matters.

Zooming out, budget analysts estimate the law increases federal deficits materially over the next decade. Markets—not politics—will decide how much of that shows up in borrowing costs, but it’s a factor to monitor when you’re comparing lease vs. own or sequencing a development pipeline.

Practical next steps

• Owner-operators: If you’re planning a new plant, ask your tax advisor to test whether your building qualifies as “qualified production property” and how to document the production square footage. Lock in start and in-service dates that fit the window.
• Landlords: Design shells (power, clear heights, circulation) to help manufacturers capture the incentive—and consider how that tenant benefit can support rent, term, or speed-to-lease. Use the larger Section 179 expensing for targeted improvements that reduce friction to occupancy.
• Developers and buyers: Map current and expected Opportunity Zones for land banking and phased projects; coordinate with municipalities on infrastructure where manufacturing is already clustering (I-70/I-71, Rickenbacker, Licking County).
• Owners of older assets: If you want to use 179D, get designs moving so construction starts before the June 30, 2026 cutoff; price scenarios with and without that deduction.

If you’d like, we can tailor these rules to a specific property or plan—owner-occupied builds, lease-ups, or portfolio refreshes in Ohio—and coordinate with your tax professional to validate the numbers.

*This communication is for informational purposes only and does not constitute tax advice. We are not tax advisors; please consult a qualified tax professional about your specific situation.