Parking ratio - Dividing the total rentable square footage of a building by the building's total number of parking spaces provides the amount of rentable square feet per each individual parking space.
Participating Debt - In addition to collecting a contract interest rate, participating debt allows the lender to have 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.
Pass-Through Expense - An expense associated with tenancy in which landlord "passes through" to tenant certain increases in building operating expenses occurring after a base year in the lease.
Percentage Ren - Provides for a rent to be paid as a percentage of retail sales, usually quarterly or annually. Often coupled with a base rent.
Per Diem Interest - Interest calculated per day. (Depending on the day of the month on which closing takes place, you will have to pay interest from the date of closing to the end of the month. Your first mortgage payment will probably be due the first of the following month.)
Permanent Financing - A mortgage loan, usually covering development costs, interim loans, construction loans, financing expenses and marketing, administration, legal and other costs. This loan differs from the construction loan in that financing goes into place after the project is constructed and open for occupancy. It is a long-term obligation, generally for a period of 10 years or more.
Phase I Environmental Report - A comprehensive report required by most Lenders and produced by an independent company that details the current environmental condition of a property. Typically requires a historical review of the propertyˆ‚s previous uses and may require a operations and maintenance (O M) plan for the future removal of asbestos and other harmful items.
Physical Condition Report - A comprehensive report required by most Lenders and produced by an independent company that details the current physical condition of a property. Typically includes specific items that require immediate repair as well as those items that should be replaced over the life of the loan. Basis used to establish the annual Replacement Reserve Escrow for the property.
Points - Interest prepaid to the lender at closing. Each point is equal to 1 percent of the loan amount.
Potential Gross Income - The amount of income that could be potentially be produced by a real estate property assuming there are no vacancies or collection losses. Does not include miscellaneous or other income.
Power of Attorney - A document by which one person (called the "principal") authorizes another person (called the "attorney-in-fact") to act for him/her in a specific manner in designated transactions.
"Prelim" or Preliminary Report - A written report issued by a title company, preliminary to issuing title insurance, which shows the recorded condition of title of the property in question. See Commitment.
Prepayment - Full or partial payment of the principal before the due date. This might occur if the borrower makes extra payments, sells the property, or refinances the existing loan.
Prepayment Penalty - Fee charged by a lender for early payment of debt.
Prime Rate - The lowest commercial interest rate charged by banks on short-term loans to their most credit-worthy customers. The prime rate is not the same as the long-term mortgage rate, though it may influence long-term rates. Mortgage rates are generally higher than the prime rate, but exceptions occur at times.
Profit and Loss Statement - Financial statement showing sales, expenses and profits over a period of time.
Property Tax - A government tax based on the market value of a property.
Pro-forma - A financial or accounting statement using estimates and assumptions to project income and the performance of real property over a period of time.
Principal Interest Payments (P I) - A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to amortization of the principal balance. Commonly used with amortizing loans.
Public Domain - Land owned by the government and belonging to the community at large.
Purchase Agreement - Contract signed by buyer and seller stating the terms and conditions under which a property will be sold.