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Glossary (click letters)

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DEBT SERVICE COVERAGE RATIO (or DEBT COVERAGE RATIO) – measures a mortgaged property’s ability to cover monthly payments defined as the ratio of net operating income over the periodic payments (principal and interest) made on a loan. A DSCR of less than 1.0 means that there is insufficient cash flow generated by the property to cover required debt payments.

DEBT SERVICE – the periodic payments (principal and interest) made on a loan.

DEFEASANCE – a clause in a mortgage that gives the borrower the right to prepay a commercial mortgage by purchasing US Treasuries in an escrow account to pay off ongoing debt service.

DENSITY – the number of buildings or persons occupying a certain area of land, generally an acre.

DEPRECIATION (ACCOUNTING) – allocating the cost of an asset over its estimated useful life.

DEPRECIATION (APPRAISAL) – a charge against the reproduction cost (new) of an asset for the estimated wear and obsolescence. Depreciation may be physical, functional or environmental.

DISCOUNT RATE – the rate of interest that the Federal Reserve charges member banks for loans.

DISTRIBUTION WAREHOUSE – (also called Light Industrial) Generally the least intense industrial use. Office use is limited to management tasks for the distribution or warehouse facility, or about 15 percent of total space.

DOCK HIGH – existence and/or number of dock level doors.

DOUBLE–WIDE – a mobile home consisting of two units which have been fastened together along their length.

DUE DILIGENCE – the legal definition: a measure of prudence, activity or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent person under the particular circumstances. In CMBS due diligence is the foundation of the process because of the reliance securities investors must place on the specific expertise of the professionals involved in the transaction.

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Andrew, Sadie and your team did a great job on Dan and Annabelle’s loan, and I thank you very ...

- Scott Liming | Iron Oak Mortgage

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