Pari Passu

 Pari passu is a Latin phrase meaning “on equal steps”. In commercial real estate, the pari passu clause applies to the waterfall structure of commercial real estate partnerships and Commercial Mortgage-Backed Securities (CMBS).

Therefore in commercial real estate, Pari-Passu simply means that two investors or creditors for assets, have the same terms of investment, including the same percentage of receiving payouts and an equal risk of loss in an investment.

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