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Zero Cash Flow Net Leased Property: Structure, Financing, Advantages, Disadvantages, Tax and Regulatory Considerations

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Wednesday, May 14, 2025

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926
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This CLE webinar will discuss zero net cash flow leased property, where all net operating income services the debt owed on the property. The panel will review the financing, documentation, tax, and regulatory considerations in zero cash flow deals and will highlight the advantages and disadvantages of these types of transactions.

Description

Zero cash flow deals are currently in demand and in some markets are selling better than cash flow deals. The characteristics of a zero cash flow property are a highly leveraged asset with long-term financing at a fixed rate, which is guaranteed by an investment-grade tenant.

With a zero net lease, the tenant bears all the property-related risks and expenses and the tenant has the ability to alter the property without waiting for the landlord. The result is a passive real estate investment potentially financeable with low interest, high leverage financing that is not available for conventional multi-tenant properties.

There are both advantages and disadvantages when investing in property with zero positive net income. Real estate counsel must weigh the tax, financing, and regulatory issues that are unique to zero cash flow deals to ensure it is the best fit for their client.

Listen as our authoritative panel highlights the unique characteristics and structures of zero net cash flow leases and provides guidance for navigating these complex transactions.

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Outline

  1. Overview: characteristics of a zero net cash flow deal
  2. Current demand for zero net cash flow deals
  3. Illustration of a zero net cash flow transaction
  4. Advantages and disadvantages of a zero net cash flow lease
  5. Structuring issues
  6. Financing considerations: sale-leaseback
  7. Tax considerations: Section 467 and 1031 exchanges
  8. Why investors should consider a zero net cash flow leased property
  9. Practitioner pointers and key takeaways

Benefits

The panel will address these and other key considerations:

  • What are the key characteristics of a zero net cash flow lease?
  • How do zero net leases work and how are they structured?
  • What are the pros and cons of zero net leases?
  • What are the financing considerations with zero net leases?
  • What are the important tax and regulatory considerations?

Faculty

Miller, Ken
Ken Miller
Shareholder
Gorman & Miller

Mr. Miller specializes in commercial real estate transactions. Since 1999, he has represented clients in successfully...  |  Read More

Additional faculty
to be announced.
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You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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