Industry Terms and Definitions

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Debt Coverage Ratio
The debt coverage ratio is the ratio of the net operating income to the mortgage payment. If net operating income is projected to change over time, the investor typically reports the first year’s net operating income.
A building that has completed construction (i.e. obtained its certificate of occupancy). With a COO, the property will be considered delivered whether or not tenants have occupied the space. (Synonyms: completion; new supply)
Direct Gross Absorption
(See Gross Absorption)
Direct Leased Space
(See Leased Space)
Direct Leasing Activity
(See Leasing Activity)
Direct Net Absorption
(See Net Absorption)
Direct New Space
Space that is offered for lease directly by the building owner or landlord. If space is offered for lease by a building tenant, it is not direct space but rather is sublet space.
Direct Occupied Space
(See Occupied Space)
Direct Vacancy Rate
The total amount of physically vacant space divided by the total amount of existing inventory, expressed as a percentage. Space that is under construction (and, therefore, is vacant) is not included in vacancy calculations.
Direct Vacant Space
(See Vacant Space)
Discount Rate
Interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.
Distribution Building
A type of warehouse facility designed to accommodate efficient movement of goods. (Typical characteristics are shown in the Industrial Building Types Matrix.)
Dock-high Door
A loading dock door that is not at ground level but rather is elevated to 4 feet in order to be even with the standard tractor-trailer height for loading or unloading goods without a change in elevation. Some doors, called “semidock” or “half dock,” are constructed at a 2-foot height to accommodate smaller or lower delivery trucks.
Door-to-square-foot Ratio
The ratio of the total number of loading docks and drive-in doors to the building’s total square feet.
Double Net Lease
(See Modified Lease)
Drive-in Door
A door through which trucks, forklifts, and other machinery or vehicles can enter and exit without a change in elevation.