Pari Passu

Pari Passu in Commercial Real Estate

Pari Passu in Commercial Real Estate

In commercial real estate, pari passu simply means that two investors, creditors, or assets are on equal footing— that is, without preference to one or the other. Pari passu is most commonly used to describe the way that CRE investors receive payouts, especially when waterfall structures are being used. It’s also sometimes used to indicate that two creditors or investors have an equal claim on a borrower’s assets, especially in the case of a borrower default.