The single most important tax event for triple net lease investors in a generation happened on July 4, 2025. President Trump signed the One Big Beautiful Bill Act (OBBBA) into law, permanently restoring 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. For NNN investors, this changes everything — from how you evaluate acquisitions, to how you structure 1031 exchanges, to how much cash you keep in your pocket during Year One of ownership.
This guide breaks down what permanent 100% bonus depreciation means for net lease investors, how cost segregation studies multiply the benefit, which NNN property types offer the largest depreciation advantages, and the critical acquisition date rules you need to understand before deploying capital in 2026.
What Changed: From Phase-Out to Permanent
Under the Tax Cuts and Jobs Act of 2017, investors could deduct 100% of the cost of qualifying personal property in the year it was placed in service — but only through December 31, 2022. After that, the benefit was scheduled to phase down by 20% each year:
2022: 100% bonus depreciation
2023: 80%
2024: 60%
2025 (pre-OBBBA): 40%
2026 (pre-OBBBA): 20%
2027: 0%
The One Big Beautiful Bill Act reversed this phase-out entirely. For qualifying property acquired and placed in service after January 19, 2025, 100% bonus depreciation is now permanent. There is no sunset date. This is not a temporary extension — it is a structural change to the tax code that NNN investors can build long-term strategies around with confidence.
The OBBBA also increased Section 179 expensing limits from approximately $1.25 million to $2.5 million, with the phase-out threshold raised to $4 million, providing additional flexibility for investors to immediately expense qualifying assets.
Why This Matters Specifically for NNN Investors
Triple net lease properties are often viewed purely as income plays — predictable rent checks from investment-grade tenants with minimal landlord responsibility. But the tax side of NNN investing has always been equally powerful, and permanent bonus depreciation supercharges it.
When you acquire a NNN property, you are not just buying a building. You are buying a collection of components — parking lots, landscaping, signage, specialized electrical systems, interior fixtures, HVAC components, and site improvements — each of which has a different depreciable life under IRS guidelines. A cost segregation study identifies these components and reclassifies them from the standard 39-year commercial depreciation schedule into 5-year, 7-year, and 15-year categories.
Here is where bonus depreciation transforms the math. Without it, a component reclassified to a 5-year life saves you 20% of its value per year. With 100% bonus depreciation, you capture all five years of deductions immediately — in Year One.
For a typical NNN property, a cost segregation study identifies 20% to 40% of the building’s value as eligible for accelerated depreciation. With 100% bonus depreciation now restored permanently, the entire reclassified amount can be deducted in the first year of ownership.
The Numbers: A Cost Segregation Example for NNN Properties
Consider a $2 million NNN retail property acquired in 2026 with an investment-grade tenant on a 15-year absolute net lease. Under standard straight-line depreciation, the building (excluding land) depreciates over 39 years, producing roughly $41,000 in annual deductions.
Now apply a cost segregation study. The engineering analysis identifies 30% of the building value — approximately $480,000 — as qualifying for accelerated depreciation schedules (5-year, 7-year, and 15-year property). With permanent 100% bonus depreciation, the entire $480,000 is deductible in Year One.
At a 37% federal tax rate, that translates to approximately $177,600 in first-year tax savings — compared to roughly $15,200 under the standard depreciation method. That is a difference of more than $162,000 in cash returned to the investor in the first year alone.
The cost of a quality cost segregation study on a $2 million property typically runs $15,000 to $25,000, delivering an immediate return of 7x to 12x on the study investment. Under the previous 40% bonus depreciation rate (pre-OBBBA), the same study would have produced first-year savings of roughly $71,000. The permanent restoration to 100% effectively increases the ROI on cost segregation studies by approximately 66% compared to the 2025 pre-OBBBA rate.
The Critical Acquisition Date Rule
This is the detail that trips up investors — and it is non-negotiable.
To qualify for 100% bonus depreciation under the OBBBA, the property must be both acquired and placed in service after January 19, 2025. The IRS defines the acquisition date based on when the taxpayer enters a binding written contract. If a binding contract was executed on or before January 19, 2025, the property does not qualify for 100% bonus depreciation, even if closing occurs in 2026.
This means investors executing 1031 exchanges or purchasing NNN properties today — in February 2026 — are squarely in the sweet spot for full qualification. However, any deals that originated under contracts signed before the cutoff date remain subject to the prior phase-down schedule.
For 1031 exchange investors, the timing implication is straightforward: coordinate your exchange timeline so that replacement properties are acquired under new contracts dated after January 19, 2025. This ensures full eligibility for 100% bonus depreciation on the replacement asset, maximizing the tax-deferred wealth-building power of the exchange.
Which NNN Property Types Benefit Most
Not all net lease properties produce the same depreciation benefit. The magnitude of the advantage depends on how much of the property’s value consists of qualifying personal property and land improvements that can be reclassified through cost segregation.
Convenience stores and gas stations stand out as the single most advantageous NNN property type for bonus depreciation. Properties where 50% or more of gross revenues derive from petroleum sales — or where 50% or more of floor space is devoted to petroleum marketing — can qualify for 100% bonus depreciation on the full value of improvements, not just the reclassified components. This is why convenience store cap rates compressed 10 to 15 basis points immediately following the OBBBA signing, as investor demand surged for these tax-advantaged assets.
Car washes are another high-depreciation NNN asset class. The automated equipment, specialized plumbing, and mechanical systems in modern car wash facilities produce a high ratio of qualifying personal property. Combined with 100% bonus depreciation, investors can often depreciate a substantial portion of the acquisition price in Year One.
Quick-service restaurants (QSR) offer meaningful depreciation through kitchen equipment, hood systems, walk-in coolers, specialized electrical, and signage. National brands with investment-grade credit — and long-term absolute net leases — combine the income stability NNN investors want with enhanced tax benefits.
Medical office and healthcare properties provide depreciation opportunities through specialized medical equipment, lab buildouts, and tenant improvements. As healthcare real estate continues to grow as a net lease category, cost segregation becomes an increasingly valuable tool for investors in this sector.
Dollar stores and pharmacy properties offer more modest — but still meaningful — depreciation through site improvements, parking lots, signage, and interior fixtures. The trade-off is simplicity: these properties are straightforward NNN investments where the primary value proposition is income stability from corporate-guaranteed leases.
Bonus Depreciation and the 2026 CRE Debt Maturity Wall
The restoration of permanent bonus depreciation coincides with another major force in the commercial real estate market: the debt maturity wall. An estimated $930 billion in commercial real estate loans are scheduled to mature in 2026, creating what many industry observers describe as a generational buying opportunity for well-capitalized investors.
Owners who acquired properties during the low-rate era of 2015 to 2021 now face refinancing at rates nearly double their original terms. Many will be unable to bridge the equity gap, resulting in motivated sellers and — in some cases — distressed dispositions. For NNN buyers with cash or pre-approved financing, this dynamic creates the potential to acquire investment-grade tenanted properties at wider cap rates than have been available in years.
When you combine discounted acquisition pricing with permanent 100% bonus depreciation, the total return equation shifts dramatically. An investor who acquires a quality NNN asset at a 6.5% to 7.0% cap rate — and then captures $150,000 or more in first-year tax savings through cost segregation — is effectively generating a double-digit first-year return before the property even appreciates.
Key Tax Benefits Now Permanently Available to NNN Investors
The OBBBA did not just restore bonus depreciation. It permanently locked in several complementary tax provisions that compound the benefits for net lease investors.
The Qualified Business Income (QBI) deduction under Section 199A — which provides up to a 20% deduction on qualified business income for pass-through entities like LLCs — was made permanent. Without the OBBBA, this deduction would have expired at the end of 2025. For NNN investors who hold properties through pass-through structures, this ongoing deduction adds substantial value.
1031 exchanges remain fully preserved, allowing investors to defer federal capital gains taxes and depreciation recapture by exchanging into replacement NNN properties. Combined with permanent bonus depreciation, a disciplined 1031 exchange strategy can allow investors to build increasingly valuable portfolios while continuously deferring taxes — a wealth compounding engine that is now more powerful than at any point in modern real estate investing.
Long-term capital gains treatment on property sales (typically 15% to 20% for most investors) continues to provide a significant advantage over ordinary income tax rates, making the exit strategy for NNN properties as tax-efficient as the acquisition strategy.
Action Steps for NNN Investors in 2026
The window created by permanent bonus depreciation, attractive cap rates, and the CRE debt maturity wall will not remain this favorable indefinitely. Cap rate compression has already begun in certain NNN sectors — particularly convenience stores and car washes — and is expected to accelerate as more investors deploy capital to capture these tax advantages.
Commission a cost segregation study on every NNN acquisition above $500,000. The ROI at 100% bonus depreciation is compelling at virtually every price point for commercial properties. Work with a qualified engineering and tax firm — the study must be defensible under IRS audit.
Review existing NNN holdings. If you acquired properties after September 27, 2017, and never performed a cost segregation study, a look-back study can capture previously unclaimed deductions without amending prior tax returns.
Coordinate 1031 exchange timing to ensure replacement properties are acquired under contracts dated after January 19, 2025.
Evaluate convenience store, car wash, and QSR acquisitions specifically for their enhanced depreciation profiles. These asset types offer the highest first-year tax savings when combined with cost segregation.
Consult with your CPA and tax advisor before executing any depreciation strategy. State tax conformity varies — not all states follow federal bonus depreciation rules — and individual tax situations require professional analysis.
Disclaimer: This article is for informational purposes only and does not constitute tax or legal advice. Consult with qualified tax and legal professionals before making investment decisions. Tax laws are complex, and individual circumstances vary.
Build Your Investment Grade Net Lease Portfolio
At Investment Grade, we help investors and family offices identify, analyze, and acquire net-leased properties with investment-grade tenants, strong lease structures, and optimal tax profiles. Whether you are deploying capital for the first time, executing a 1031 exchange, or scaling a portfolio of income-producing assets, our team provides the market intelligence and deal sourcing you need to invest with confidence.
Contact us to discuss how permanent bonus depreciation and current market conditions can work together in your net lease investment strategy.
