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Commercial Real Estate Glossary

Glossary

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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.

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.

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