Parking ratio - The amount of rentable square feet per each individual parking space calculated by dividing a building's total rentable square footage by the total number of provided parking spaces.
Partial sales - The sale of an interest in real estate that is less than a 100% interest. Examples are partial sales are easement rights, parcel of land or retail pad, or a single structure of a multi-building investment.
Partial taking - The condemning of part of an owner's property under eminent domain laws.
Participating debt - In addition to collecting a loan's contracted interest rate, participating debt allows a lender to gain participatory equity rights through a share of increases in income and/or increases in residual value over the loan balance or original value at the time of loan funding.
Participation - A mortgage wherein the lender receives the mortgage payments plus a percentage of the gross revenue.
Party in interest - Under ERISA's 2002 Modernization Act: "Parties in interest" include employers, unions and, in certain circumstances, fiduciaries. Fiduciaries are only parties in interest when they enter into a transaction on behalf of a plan sponsor. It does not include service providers or their affiliates. A party in interest's affiliate does not include remote affiliates of employers, unions and fiduciaries (e.g., 10 percent owners), as well as their employees.
Pass-through certificate - Certificate representing an underlying pool of mortgages through which payments of principal and interest are passed to the certificate's holders.
Payout ratio - The percentage of the primary earnings per share, less extraordinary items paid as cash dividends to common stockholders over the prior 12 months.
Pension liability - The total capital amount needed to fund vested portion of a pension fund.
Percentage rent or lease - A rent structure, commonly used for large retail stores, where rent payable under a lease is calculated as a percentage of a tenant's gross sales or gross revenues.
Performance - A measure of an account's or fund's quarterly changes in values attributable to investment income, unrealized or realized appreciation, and the investors' total gross return both before and after management fees. Since formulas used to calculate performance are varied, comparisons are difficult to make.
Performance bond - A surety bond posted by a contractor guaranteeing the contract's full performance with the proceeds to be used to complete the contract or to compensate the owner for losses incurred due to nonperformance.
Performance measurement - The process of benchmarking the performance of an investor's real estate in terms of individual assets, advisers or managers and portfolios. There is no standard for determining the scope of performance measurement.
Performance-based fees - An adviser's or manager's fees based on returns to investors, often packaged with a modest acquisition and asset-management fee structure.
Permanent loan - A property's long-term mortgage.
Phase I Environmental Report - A report done by an environmental engineer following a study to reveal any known toxic contamination sites on or near the subject real property. The engineering includes a research of the public environmental databases plus a physical site inspection. The report provides lenders with an analysis of the data and recommendations for the lender.
Phase II Environmental Report - The same research included in a Phase I report with the addition of an analysis of soil samples from the property. The environmental engineer will take soil borings to look for any actual toxic contamination in the soil or ground water.
PITI - An acronym for Principal, Interest, Taxes and Insurance. Usually a mortgage payment includes these four components.
Plan assets - All of a pension plan's total assets.
Plan sponsor - The legal entity that creates, contributes to, and is responsible for the administration of an employee benefit plan. Often used interchangeably to describe administrative support staff and trustees or investment board members who govern it.
Plat - Map of a specific area, such as a subdivision, delineating the boundaries of the overall specific area and its individual lots along with the easements and streets.
Portfolio management - A process of formulating, modifying and implementing a strategy for real estate investment or property management in light of an investor's broader overall investment objectives.
Portfolio turnover - The average time from the funding of an investment in a collection of assets to the time it is repaid or sold.
Power of sale - A mortgage or deed of trust clause giving the mortgagee (or trustee) the right and power, upon default in the payment of the debt secured, to advertise and auction the property.
Preferred shares - Stocks that have prior claim on distributions, and assets in the event of dissolution, up to a defined amount before the claims of the common shareholders. Preferred shareholders are under all creditors in dissolutions.
Preleased - Area in a planned building that is leased prior to the start of construction or the issuance of a certificate of occupancy.
Prepayment rights - A borrower's right to make partial or full payment of the total principal balance without penalty before the maturity date.
Price to earnings ratio - A ratio calculated by dividing the current share price by the sum of the primary earnings per share from continuing operations, before extraordinary items and accounting changes, over the prior four quarters.
Prime space - A reference to first-generation space that is available for lease.
Prime tenant - A property's major tenant in a building, or anchor tenant.
Principal payments - The repayment of a lender's borrowed funds or return of an investor's capital.
Private placement - The sale of a security without a public offering to an accredited investor in a manner that makes it exempt from the registration rules and requirements of the Securities and Exchange Commission.
Private REIT - An infinite- or finite-life real estate investment company structured as a real estate investment trust whose shares are sold through a private placement.
Pro rata - From the Latin "according to a percentage or rate". In regards to a tenant, a proportionate share of expenses for the maintenance and operation of the property, usually proportioned by the number of units.
Production acres - The area of land that can be used in agriculture or timber operations to produce income. Does not include such areas that are used for crop or machinery storage, outbuildings or other operational support areas.
Prohibited transaction - ERISA defined several transactions as prohibited between a pension plan and a party in interest, such as: the sale, exchange or leasing of any property; a loan or other extension of credit; transfer of plan assets to or use of plan assets by a party in interest; the furnishing of goods or services; and the acquisition of employer real property in excess of ERISA limits.
Property Analysis - A lender's analysis of an appraiser's report. The final determination of the property's value rests with the lender. All three approaches to establishing market value, including the Income Approach to Valuation and the cap rate the appraiser used are reviewed.
Property Classification - Most lenders will classify a property by its age and needed maintenance.
Prudent man rule - The standard to which a fiduciary is held accountable under ERISA. "Act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of a like character and with like aims."
Punch list - An itemized list drawn up by the owner to document incomplete or unsatisfactory items after the contractor has notified the owner that the tenant space is substantially complete.
