It used to be that when Jonathan Hipp, head of Avison Young's U.S. Net Lease Group, would get a client requesting a zero cash flow property transaction—meaning the rent the buyer receives is equal to what it will pay on its mortgage—it would be for the bonus depreciation benefits that such a deal would offer.

But more recently he has been seeing a lot of clients sitting across from his desk requesting a zero cash flow deal for another reason: they are giving the keys to a property, usually an office building, back to the lender and want to reduce their tax bill as much as possible. "When a lender takes a property back it is not a forgiveness of the debt," he explains. "You have a capital gain and have to pay taxes on that gain," he explains. This is especially significant for owners who've had the property for many years or even decades and have refinanced many times."