Definition
A minimum return paid to limited partners before the sponsor participates in profits.
Example
The 8% preferred return was cumulative, accruing in years when cash flow fell short.
Related terms
Frequently asked questions
What does Preferred Return mean in real estate?
A minimum return paid to limited partners before the sponsor participates in profits.
How is Preferred Return used in practice?
The 8% preferred return was cumulative, accruing in years when cash flow fell short.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.