Commercial Real Estate Lending

This one-day interactive course introduces the participant to the expansive world of Commercial Real Estate Lending. This foundational course reviews the origination process and due diligence a present day commercial lender exercises when underwriting a new loan. A variety of property and loan types will be analyzed and various real estate valuation methodologies will be demonstrated. Particular focus will be on lender protections found in the legal documents surrounding a commercial real estate loan. A broad examination of the risks surrounding CRE loans as well as the early warning signals which should trigger internal lender discussions are identified and discussed. Loan administration, loan servicing and special servicing (when things get really bad!) will all be fleshed out.

Course Objectives

By the end of this session the course participants will be able to:

• Identify the different commercial real estate loan types
• Understand the various risks when lending against different property types and in different economic cycles
• Describe the due diligence documentation and process a lender should employ before putting capital at risk
• Explain the role of and the protections embedded in the commitment letter, promissory note, and mortgage documents
• Identify what risks are associated with the different levels in the capital stack
• Qualitatively and quantitatively evaluate whether a borrower will be able to repay its loan
• Identify the different bank examiner classifications of CRE loans

Suggested Prerequisites: None

Program Level:Foundational

Advance Preparation: None

Computers and Financial Calculators: N/A

Recommended CPE Credits: 7