Management Assessment, Competitive Forces, and Projected Performance
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In this 7th course of the Commercial Real Estate Underwriting Skill Series, participants will review underwriting standards, examine essential management capabilities, explore competitive forces, shape Business Driver values, assess UCA cash flow for borrowing and repayment, and identify non-financial red flags affecting performance.
Certificate
1 credit or $295
Cost
1.5 - 2 Hrs.
Duration
1 hr.
Prep Time
1
Quiz
Overview
In the seventh webinar session, participants review the fundamental differences between description and analysis in assessing and interpreting the application of underwriting standards. They examine the management capabilities essential for business success. They explore the competitive forces that will likely impact key Business Drivers. They examine the methodology for shaping Business Driver values for a "most likely" projection scenario for the borrower. In addition, participants assess the projected UCA cash flow statement in identifying borrowing causes and likely repayment sources. Further, they explore a range of common non-financial red flags that may emerge and impact the borrower's operating performance in the coming period.
Who Should Attend
This Course is ideal for participants currently in or aspiring to enter the following job functions:
- Credit Management
- Commercial Real Estate Administration
- Commercial Loan Portfolio Management
- CRE Lending
- Private Banking
- Loan Review
- Special Assets
- Construction Lending
- Credit Analysis
Prerequisites
Familiarity with accrual financial statements and accrual financial statement terminology for a commercial real estate operation, as well as completion of prior sessions in the Credit College.
Objectives
By the end of the webinar session, participants will be able to:
- Identify management capabilities that must be in place and working effectively for a company to succeed in both good and bad times.
- Identify the competitive forces at work in the borrower's market and assess their likely impact on key Business Drivers and subsequent financial performance.
- Implement the methodology for shaping assumptions about future Business Driver values in a "most likely" projection scenario for the borrower that includes projected revenues and expenses for the income producing property.
- Use projection results and the projected UCA cash flow statement to determine borrowing causes and cash repayments sources.
- Assess historical and projected UCA cash flow statements to identify the likely amount of additional short and long term interest-bearing debt required by the borrower and compare those amounts with the borrower's requests.
- Identify non-financial red flags that may apply to the borrower, including the subject property, and assess their likely impact on borrowing causes and repayment sources in the next operating period.
Materials(access provided with registration)
- Excerpts from Financial Statements for Clovis Supply, Inc., Fresno Properties LLC, and Modesto Services, Inc.
- Personal Financial Statement and Personal Cash Flow Statement for Fritz Schumacher
- Excerpts from Shadelands Glen's Credit Narrative
- Financial Statements for Sequoia Properties
- Exercise for the Session 7 Webinar
- Webinar Presentation Slides
- Webinar Poll Questions
- Webinar Poll Solutions
- Exercise Solutions
This is Course 7 of 8 in the Commercial Real Estate Underwriting Skill Series
The CRE Analytical Process and Credit Write-Up
Borrower Cash Flow, Ratio Analysis and the First Way Out
Personal Cash Flow, Guarantor Analysis and the Second Way Out
Appraisal Reports and Assessing Market Value
The Income Capitalization Approach and the Cap Rate
Underwriting Standards, NOI and Breakeven Analysis
Management Assessment, Competitive Forces, and Projected Performance
Repayment Risks and Covenants
