Underwriting CRE Loans

 Full Day: 8:30 am to 4:30 pm

s CRE lending seminar provides attendees an  understanding of how commercial banks approach underwriting sound commercial real estate loans.  We review the primary credit concerns that lenders face in underwriting commercial real estate loans.

Sector Operating Characteristics

Attendees profile the general background of the commercial office, retail, multifamily, hotel and industrial sectors. We review sample operating statements and identify;

• The common financial/accounting terms associated with each sector’s operating statement. 
   
• The operating factors affecting each sector’s cash flow available for debt service. Common debt service coverage (DSC) requirements for each sector.
   
• The source and determining factors affecting rental income, ancillary revenue & operating expenses.
   
• The unique nature of each sector with regard to property management & fees, rental income, tenant leases, and specific operating costs.

Lending to Homebuilders

Attendees review how to evaluate the unique risks in lending to a local home builder.  We cover a process for analyzing a builder’s financial statements, monitoring construction & avoiding common lender mistakes.

Construction Contractor Evaluation

We review the key elements that determine the credit worthiness of construction contractor;

· We outline a checklist for evaluating a contractor.

· The warning signs that may indicate higher risk.   Why contractors typically fail.

· How to interpret the key ratios used in analyzing a contractor’s financials.

Real Estate Developer/ADC Loans

Acquisition, Development & Construction (ADC) loans represent unique risks to a lender.  In this training section attendees;

· Outline the key areas of risk for ADC loans. 

· The basics for evaluating a real estate developer. 

· Warning signs of a higher risk developer.

Negotiating CRE Loans

We review the concerns and issues typically confronting lenders when negotiating & structuring CRE loans. Attendees learn to anticipate and prepare for issues typically arising from the following areas;

• Tax & Insurance Escrow Accounts

• Reimbursement of Lender’s Costs

• Guaranties

• Reserves

• Property Insurance

• Personal Property Collateral

• Lender Approval & Consents

• Financial Covenants

• Tenant Deposits & Letters of Credit

• Events of Defaults.

• Property Alterations

• Partial Release Provisions

Reviewing Tenant Leases & Other Agreements

Tenant leases are a crucial part of determining cash flow from a CRE investment property. In the seminar, attendees learn when a lender should closely review tenant leases. We cover the following regarding tenant leases and other agreements;

• The most important questions that should be answered when reviewing CRE tenant leases
• Concerns specific to anchor tenant leases
• When a lender should require that tenants provide Estoppel Certificates to the bank
• Anticipating and preparing for issues when using a Non-disturbance Agreement
• How to review a Ground Lease
• What to look for in a Property Management Contract

CRE Loans in Distress/Default

We review the options, strategies and potential steps in dealing with a commercial real estate loan that may soon go into default. Attendees review the following;

• Monitoring a financially distressed CRE loan 

• Practical steps in preparing for a potential default 

• Improving the bank’s position when restructuring a financially distressed commercial real estate loan

Commerical Real Estate Lending
  

Locations to be announced

Seminar Time:
8:30 am to 4:30 pm

Seminar Fee:
$250 per attendee