The IRS released interim guidance today (IR-2026-25) on the special depreciation allowance for qualified production property under OBBB. Most healthcare professionals will read the words "production property," conclude this is about factories, and scroll past.
That conclusion misses something useful. The IRS definition is broader than it looks.
Qualified production property covers buildings used in production, processing, and fabrication activities. For most real estate audiences, that's industrial parks and manufacturing. For a healthcare-adjacent audience, that catches a quieter category of asset that has been hiding in plain sight: compounding pharmacies, dental labs (especially the ones running milling and CAD-CAM equipment), imaging centers with on-site film and contrast processing, certain medical device fabrication facilities, and some specialty veterinary operations.
These properties don't look like "production" assets if you're standing across the street. They look like medical office. The tax architecture is different. The accelerated depreciation pathway under the new guidance can be materially more aggressive than what you'd get on a standard commercial property.
This matters in two specific scenarios.
If you already own (or co-own) a property where this kind of operation is the primary tenant, the depreciation analysis on that asset may have changed. Worth a fresh look with your CPA. The classification rules require a careful read of what the property actually does. Not a vibe.
If you are being pitched a deal involving a healthcare-adjacent production tenant — and let me be specific, this is often where syndicators get creative — read the depreciation projections carefully. Aggressive depreciation assumptions need to match what the property actually does. Sometimes the math works. Sometimes the math is wishful thinking dressed up in better fonts.
For most readers of this site, this isn't an immediate action item. It's a category to be aware of when you see it. The investors who will get real value from this rule are a smaller subset — people with a specific opportunity in front of them.
If that's you, bring it to your CPA with the IR-2026-25 guidance pulled up. Ask whether the property's use case actually qualifies, and what the depreciation schedule looks like if it does.
The structural opportunities show up in places most people aren't looking. That's the gap.
— John