Commercial Mortgage Terms Glossary D - Ocean Capital Lending

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Commercial Mortgage Terms Glossary D

Data
Refers to information collected and presented in a form that facilitates processing and analysis.

Data dispersion
The amount or degree to which data points in a series are spread or dispersed about their mean (also referred to as variation about the mean).

Debt-coverage ratio (DCR)
Ratio of net operating income to annual debt service. Expressed as net operating income divided by annual debt service.

Demand
The volume or quantity of a product or service purchased, or willing to be purchased, in relation to price.

Demand factors
Elements or forces that influence the demand for goods and services in a given market area.

Demographics
Characteristics of human populations as defined by population size and density of regions, population growth rates, migration, vital statistics, and their effect on socio-economic conditions.

Depreciation
The loss of utility and value of a property.

Depreciation
The loss of utility and value of a property.

Desktop GIS
GIS software programs that support a wide variety of functions, queries, and mapping capabilities for personal computer-based applications, geared toward visual presentation and descriptive analyses of geo-coded data.

Differential cash flow
The difference that results when the cash flows from one alternative are subtracted from the cash flows from another alternative.

Direct survey method
The use of personal interviews with key personnel in all major firms within a given community to determine the percentage of a firm’s revenues obtained from sales made outside the local economy for the purpose of estimating firm-specific basic employment and, by aggregation, the total basic employment in that community; a method that is known to
be costly and time consuming.

Disaggregating demand
The process of separating and identifying the various forces and factors which affect the demand for a given property type in a given market or the differentiation of demand by category (in reference to tenure, household income, and geographic submarket).

Disaggregating supply
The process of separating and identifying the various forces and factors which affect the supply of a given property type in a given market or the differentiation of supply by category (including leased versus owned, unit type, price, and geographic submarket).

Discount rate
The percentage rate at which money or cash flows are discounted. The discount rate reflects both the market risk-free rate of interest and a risk premium. Also see opportunity cost.

Discounted effective rent
The cash flows over the term of the lease, discounted to the present value.

Discounting
The process of reducing the value of money received in the future to reflect the opportunity cost of waiting to receive the money.

Displaced sales
Sales that result from purchases made by customers who are not located in the subject service area (represents a revenue gain for retail establishments as sales are generated from consumers who reside outside the local trade area).

Diversification
A method of reducing risk by investing in unrelated (uncorrelated) assets.

Drain information
Information (substantiated and rumored) regarding inventory that is to be removed from the market by the forecast period.

Drive-time approach
An approach to estimating the trade area (and sales/revenue potential) for a given retail establishment or center based on the central place theory concept of range and how far people are willing to travel to obtain retail goods as defined by drive time or mileage.

Due diligence
The process of examining a property, related documents, and procedures conducted by or for the potential lender or purchaser to reduce risk. Applying a consistent standard of inspection and investigation one can determine if the actual conditions do or do not reflect the information as represented.

Dynamic system
A complex and ever-changing or evolving set of diverse and interrelated entities and agents which are organized into a coherent and working totality which serves multiple and/or common purposes or objectives. Also see system and market dynamics.