Yes, you are correct on all points.
Your business property will include the square footage of your office as well as your shop, as long as both are used 100% for business purposes.
If the improvements you made were all part of the building and not equipment, etc, then yes, you can list them as one item. You generally don't want to combine anything that could be moved or detached and replaced.
Yes, the building would be a separate asset depreciated at the lower of cost or Fair Market Value when converted to your business use. Sometimes a Property tax statement is a good place to start deciding on the value.
Here is more information on Qualified Improvements: Qualified Improvements
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