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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Thursday, July 31, 2025

  • schedule Time

    1:00 PM E.T.

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

$347.00

This course is $0 with these passes:

CLE
ALL

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.

Faculty

Christopher Fiore Marotta
Partner
Holland & Knight LLP

Mr. Marotta is a tax attorney in Holland & Knight's Boston office. He assists clients with a range of domestic and international tax issues. Mr. Marotta is experienced in negotiating and structuring the purchase and sale of businesses, negotiating loan agreements for lenders and borrowers, drafting joint venture agreements (including with respect to real estate matters), advising insurers on representation and warranty policy coverage, structuring inbound and outbound investments, forming investment funds, drafting U.S. tax disclosures for private placement memoranda and public offerings, and other issues relating to mergers, acquisitions and reorganizations. He also advises on Section 1202 qualified small business stock (QSBS) issues. Prior to joining Holland & Knight, Mr. Marotta advised private equity and corporate clients on the tax aspects of bankruptcies and domestic and multinational mergers and acquisitions in the New York office of an international law firm. He also has experience providing advice on the structuring of investments in overseas and domestic target companies and other domestic and international tax matters from working in the New York office of an international accounting firm.

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Ken Miller
Shareholder
Gorman & Miller

Mr. Miller specializes in commercial real estate transactions. Since 1999, he has represented clients in successfully closing over $4 billion of commercial real estate transactions throughout the United States, primarily involving net leased properties. His recent transactions include over $500 million in sale-leasebacks with public companies, such as Rite Aid, Pep Boys and Fleetwood Enterprises.

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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.

Outline

  1. Overview: characteristics of a zero cash flow investment
  2. Creating a zero cash flow investment
  3. Advantages and disadvantages of a zero cash flow investment
  4. Tax considerations: Section 467 and Section 1031
  5. Nonprofit investor considerations: UBTI and ERISA

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?