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Commercial Real Estate Glossary



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).


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.

Economic base

Those economic activities or sectors in a local or regional economy that account for a certain share of the area's income that is generated from exports of goods and services.

Economic base analysis

Inquiries that focus on the extent to which changes in basic employment (export-oriented activities and associated wage-income) affect the economic, employment, and population growth of a local or regional economy.

Economic base multiplier

A measure that provides a rough estimate of how changes in basic employment will affect total employment in a given region (all other things being equal); defined as the ratio of total employment to basic employment.

Economic characteristics

Attributes of the workforce, including production and employment activities.

Economic obsolescence

The reduction in a property’s value due to external circumstances such as legislation or changes in nearby property use.

Economic sectors

Branches or divisions of a local or regional economy in which particular activities take place.

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