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Pad: A freestanding building site within or adjacent to a shopping center. Examples of pads include gas stations, restaurants or banks. Also called an outlot.
Parking Ratio: The ratio calculated as the number of parking spaces available per one thousand square feet of rentable area.
Pass Through: A reimbursement by the tenant to the landlord for expenses of a property which are originally paid by the landlord. The mechanics for calculation of the pass through will depend upon whether the lease is a gross lease or a net lease. Also called an expense recovery.
Percentage in Lieu: Rent paid by a retail tenant and calculated as a percentage of gross sales which is paid by the tenant in lieu of base rent. Percentage in lieu clauses are sometimes included in retail leases to offer the tenant rent relief if gross sales fall below a certain level or if an anchor tenant fails to continuously operate within their premises.
Percentage Lease/Rent: A lease, commonly used for commercial property, whose rental is based on the tenant’s gross sales at the premises; it usually stipulates a base monthly rental plus a percentage of any gross sales above the certain amount. Also called overage lease/rent.
Percentage Rent Breakpoint: In retail leases, the amount which gross sales must exceed before a tenant is required to begin paying percentage rent. Breakpoints may be natural or an arbitrary dollar amount. A natural’ breakpoint reflects the amount of gross sales which, when multiplied by the overage percentage, equals base rent (stated differently, a natural breakpoint is calculated as base rent divided by the overage percentage). If a breakpoint is not natural, then the amount of the breakpoint (stated as an absolute gross sales amount or gross sales per square foot) is arbitrarily determined based upon negotiation between the landlord and tenant.
Promotional Fund: A fund established by the landlord of a retail property whereby tenants are required to make specified contributions to the fund for the purpose of promotion of the property. The fund is managed by the landlord.
Property Insurance: Insurance which covers losses occurring from fire, explosion and other perils. When obtained by the landlord, the property being insured is the building itself. When obtained by the tenant, the property being insured is typically leasehold improvements and personal property of the tenant. The coverage amount is often stated as a percentage of replacement cost or replacement value.
Proportionate Share: The percentage of reimbursable expenses to be reimbursed by a tenant to the landlord.
Pro-rata Share: The percentage which, when multiplied by reimbursable expenses (less an expense stop if a gross lease), equals the amount to be reimbursed by a tenant to the landlord for expense recoveries. Typically, the percentage is calculated by dividing the net rentable area of a tenant’s leased premises by the net rentable area of the building, although this is not always the case.
Protected Class: Any group of people designated as such by the U. S. Department of Housing and Urban Development (HUD) in consideration of federal and state civil rights legislation. Currently includes ethnic minorities, women, religious groups, the handicapped and others.