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Glossary

Our glossary of industry terms is one of the most visited sections of our site. We work continually to keep it current and are always adding new terms. In addition, if you ever can't find an industry word you are looking for, let us know. We'll research it and add it for you.


  • Deal structure

    With regard to the financing of an acquisition, deals can be unleveraged, leveraged, traditional debt, participating debt, participating/convertible debt or joint ventures.

  • Debt service

    The outlay necessary to meet all interest and principal payments during a given period.

  • Debt service coverage ratio (DSCR)

    The annual net operating income from a property divided by annual cost of debt service. A DSCR below 1 means the property is generating insufficient cash flow to cover debt payments.

  • Dedicate

    To appropriate private property to public ownership for a public use.

  • Deed

    A legal instrument transferring title to real property from the seller to the buyer upon the sale of such property.

  • Deed in lieu of foreclosure

    A deed given by an owner/borrower to a lender to satisfy a mortgage debt and avoid foreclosure.

  • Deed of trust

    An instrument used in place of a mortgage by which real property is transferred to a trustee to secure repayment of a debt.

  • Default

    The general failure to perform a legal or contractual duty or to discharge an obligation when due.

  • Deferred maintenance account

    An account a borrower is required to fund that provides for maintenance of a property.

  • Deficiency judgment

    Imposition of personal liability on a borrower for the unpaid balance of mortgage debt after a foreclosure has failed to yield the full amount of the debt.

  • Defined-benefit plan

    An employee's benefits are defined, either as a fixed amount or a percentage of the beneficiary's salary at the time of retirement. Pension plans, Health and Welfare plans, and some Keogh plans are established as defined benefit plans.

  • Defined-contribution plan

    An employee's benefits at retirement are determined by the amount contributed by the employer and/or the employee during his or her employment tenure, and by the actual investment earnings on those contributions over the life of the fund. Examples include 401(k), thrift plans and profit sharing plans.

  • Demising wall

    The partition wall that separates one tenant's space from another or from the building's common areas.

  • Depreciation

    A decrease or loss in property value due to wear, age or other cause. In accounting, depreciation is a periodic allowance made for this real or implied loss.

  • Derivative securities

    Securities that are created artificially, i.e., derived from other financial instruments. In the context of CMBS, the most common derivative security is the interest-only strip.

  • Design/build

    A system in which a single entity is responsible for both the design and construction.

  • Discount rate

    A yield rate used to convert future payments or receipts into present value.

  • Discretion

    The level of authority granted to an adviser or manager over the investment and management of a client's capital. A fully discretionary account typically is defined as one in which the adviser or manager has total ability to invest and manage a client's capital without prior approval of the client.

  • Distraint

    The act of seizing personal property of a tenant in default based on the right and interest a landlord has in the property.

  • Diversification

    The process of consummating individual investments in a manner that insulates a portfolio against the risk of reduced yield or capital loss, accomplished by allocating individual investments among a variety of asset types, each with different characteristics.

  • Dividend

    Cash or stock distribution paid to holders of common stock. REITs must pay at least 90 percent of their taxable income in the form of dividends.

  • Dividend yield

    The annual dividend rate for a security expressed as a percent of its market price (annual dividend/price = yield).

  • Dividend-ex date

    The first date on which a person purchasing the stock is no longer eligible to receive the most recently announced dividend.

  • Dollar stop

    An agreed dollar amount of taxes and operating expense each tenant will pay on a prorated basis.

  • DOWNREIT

    An organizational structure that makes it possible for REITs to buy properties using partnership units. The effect is the same as an UPREIT, however, the DOWNREIT is subordinate to the REIT itself, hence the name.

  • Drag-Along Rights

    The right that enables a majority shareholder to force a minority shareholder to join in the sale of a company. The majority owner doing the dragging must give the minority shareholder the same price, terms and conditions as any other seller. (See also Tag-Along Rights)

  • Due diligence

    Activities carried out by a prospective purchaser or mortgager of real property to confirm that the property is as represented by the seller and is not subject to environmental or other problems. In the case of an IPO registration statement, due diligence is a reasonable investigation by the parties involved to confirm that all the statements within the document are true and that no material facts are omitted.

  • Due on sale

    A covenant that makes a mortgage due if the property is sold before the maturity date.