Real Estate Glossary D [Part 6]


Continued from…

:point_right: Real Estate Glossary D [Part 5]


A general decline in the market value of real estate.


Property abandonment or renunciation that is done on purpose. A state of decay.


A sketch or drawing of a building plan made by an architect.


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The gradual depletion of a property’s usefulness due to wear and tear or decay and decline caused by natural causes. One of the causes of depreciation and value loss.

Display home

A structure that resembles a house and is used to entice prospective buyers to enter into contracts for the purchase or construction of similar structures.

A display home is typically located near new housing estates or on a major thoroughfare.


A location with a common characteristic use (such as a retail district, residential district, etc).

Duration of Lease

The lease term. The amount of time the property is leased for. The term of a lease.

Defects liability period

The time limit within which the contractor is required, at his or her own expense, to correct any defects in the completed works caused by faulty materials or workmanship and notified in writing. The period begins on the date of issuance of the ‘certificate of practical completion’ and continues for the duration specified in the contract.

Desk review

A valuation review that is restricted to the report’s data, which may or may not be independently confirmed. Generally, a checklist of items is used. The reviewer verifies calculation accuracy, data reasonableness, methodology appropriateness, and compliance with client guidelines, regulatory requirements, and professional standards.

Determination (Rental)

A decision made by an independent valuer about a disputed rent when the landlord and tenant haven’t been able to come to an agreement or when the valuers for the landlord and tenant or a third party have been unable to reach an agreement.

Development approval

Approval from the appropriate planning authority to build, add to, modify, or change the structure of a property.

Development control plan (DCP)

Local government agencies that are in charge of town planning are required to make plans that show how property and land development will happen in their areas.

Development control plans are the names for these plans. The local government then looks at all development applications through the lens of these development control plans before giving or denying permission to build. LEPs have more power than DCPs. But
DCPs can’t be different from or at odds with LEPs. DCPs provide more detail than LEPs.

Development cost

The total cost of developing a project, including direct labour and material costs, contractor overhead and profit, and indirect costs such as taxes and development loan interest.

Development standard

Any rule in a planning instrument or deemed planning instrument that is based on a number and is used to control development.

Direct vacancy

Building vacancy available for direct occupation from owner. This excludes any sublease vacancy that may be available from a tenant.


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Discounted cash flow analysis

a) A way to look at investment opportunities in which annual cash flows are discounted to get their Net Present Value (NPV) or Internal Rate of Return (IRR). Also used as a basis for valuing some types of property;

(b) a method of financial modelling based on explicit assumptions about the future cash flow of a business or property. As a well-known method of valuing based on income, DCF analysis involves predicting a series of periodic cash flows for an operating property, a property in development, or a business. A market-based discount rate is applied to this series of projected cash flows to get an idea of how much the income stream from the property or business is worth right now. In the case of operating real estate, cash flow is usually estimated by taking gross income, minus vacancy and collection losses, minus operating expenses, and dividing by the number of periods in the year. The series of net operating incomes from each period is then discounted, along with an estimate of the reversion/terminal value at the end of the projection period. In the case of development properties, estimates of capital outlays, development costs, and expected sales income are used to come up with a series of net cash flows, which are then discounted over the projected development and marketing periods. In the case of a business, estimates of the cash flows and the value of the business at the end of the projection period are discounted. The internal rate of return (IRR) and net present value are two of the most common ways that DCF analysis is used (NPV).

Dark Space

Vacant space in a building for which the tenant is still paying rent. Tenants in large properties may invoke lease break rights if any other tenant goes dark.

Debenture (UK)

An instrument executed by a Borrower as a deed in favour of a Lender, providing the Lender with Security over the Borrower’s assets and undertaking, typically creating a Fixed Charge over the Borrower’s assets that are not disposed of in the ordinary course of business of the company and a Floating Charge over the rest of the company’s undertaking and reserving to the Lender the power to appoint an Administrator or a Receiver.

Debenture (US)

A document that proves one party’s obligation to another and the terms and conditions that regulate the relationship between the Creditor, who loans cash to the Debtor, and the Debtor, who repays the principle amount lent to it with or without interest.

Debt Securities

Debt obligations issued in the form of a Bond or Note that signify the Issuer’s pledge to repay at some future period. Issuers will issue multiple classes of Debt Securities with varying risk and return profiles in Securitisation transactions.

Debt Service Payments

Payments that the borrower is required to make under the terms of the applicable credit arrangement.

Defective Title

A land title tainted by a problem that makes the ownership or use of the land questionable or otherwise unmarketable.

Deferred Consideration

Practitioners use this term to refer to consideration that will or may be payable in the future rather than at completion. Deferred Consideration can be paid in a variety of forms, including cash, loan notes, and shares.

Deferred Interest

The amount of interest added to the principal balance of a debt obligation (whether a loan or a bond) when the contractual provisions of such debt obligation permit an interest payment in an amount less than the regular amount of interest payable.

Deferred Maintenance Account

A borrower’s account set up to cover the expense of any repairs or future maintenance on a property.


A financial instrument whose value is determined by the attributes and value of the underlying asset, which is often a commodity, bond, interest rate, equity, or currency.

Determination Date

The date of the month used as a set off date for calculating securities payments payable.

Development Construction Cost

The overall cost of building a project from start to finish, excluding site values and financial charges.

Development Finance

A loan granted to a borrower to cover development construction costs for a development.

Development Pipeline

Normally, a development programme is combined with proposed schemes that have not yet been included in the development programme but are more likely to occur than not.

Direct Property Fund

A fund that invests solely in direct property investment and does not hold any property shares, REITs, other equities, or indirect holdings.

Direct Property Investment

Obtaining legal and/or beneficial title to real land.

Discount Margin

The discrepancy between a security’s price and face value.

Discount to NAV

The percentage difference between the company’s Net Asset Value (subject to certain adjustments for debt, etc.) and its market capitalization.

Distressed Mortgage Loan

A nonperforming loan is another word for a loan that is not performing.

Distribution Date

The date of the month when securities payments are made to investors. This must fall a few days after the Decision Date.

Dodd–Frank Wall Street Reform and Consumer Protection Act

This is a United States Act that modifies the regulatory structure by creating new agencies and merging or removing others in an effort to streamline the regulatory process, increase oversight of specific institutions deemed to pose a systemic risk, amend the Federal Reserve Act, and promote transparency.

Double Taxation Avoidance Agreements

The Double Taxation Avoidance Agreements (DTAA) are bilateral agreements between two countries. The primary goal is to prevent income taxation in both countries (i.e. double taxation of the same income) and to promote and foster economic trade and investment between the two countries.

Dow Jones US Real Estate Index

An index made mostly of REITs that is aimed to give measurements of real estate securities.


A downREIT structure is identical to a UPREIT structure, except that the downREIT may hold property directly as well as property held by one or more Limited Partnerships in which the REIT is both the general partner and a limited partner.

Dollar stop

A set dollar amount for taxes and operating costs, stated for the whole building or per square foot, over which the tenant will pay its proportional share of increases. May be used for certain costs, like insurance or property taxes.