The CRE Analytical Process and Credit Write-Up
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In this 1st course of the Commercial Real Estate Underwriting Skill Series, participants will identify four essential credit write-up issues, review the credit decision process, examine financial statements for risk issues, compare business organization types, and explore the purpose and elements of single purpose entities (SPEs).
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Certificate
1 credit or $295
Cost
1.5 - 2 Hrs.
duration
1 hr.
Prep Time
1
Quiz
Overview
In the first webinar session, participants identify the four essential issues that must be addressed in every credit write-up. They review the sequential analytical steps in the credit decision process as suggested by the Financial Regulators' Policy Statement. They identify obvious risk issues that emerge from a comprehensive examination of the financial statements for a prospective borrower. In addition, participants identify the relevant similarities and differences between and among the common types of business organizations - Subchapter C corporations, Subchapter S corporations, partnerships and limited liability companies (LLCs), and sole proprietorships - and they examine the purpose and key elements of a single purpose entity (SPE).
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
- Construction Lending
- Credit Analysis
Prerequisites
Familiarity with accrual financial statements and accrual financial statement terminology.
Objectives
By the end of the webinar session, participants will be able to:
- Identify the four essential analytical issues that must be addressed in every credit write-up, regardless of borrower, business organization, industry, or proposed credit facilities.
- Identify the suggested sequence of analysis - and key focal points - for a proposed commercial real estate transaction recommended in the Financial Regulators' Policy Statement.
- State the sequential analytical steps that assure each of the four essential issues are addressed - and the regulators' analytical sequence fully incorporated - in the analytical process leading to a credit decision.
- Identify the apparent severity of the risk issues and their implications for company management that emerge from examination of financial statements for a real estate developer.
- Identify the similarities and differences between and among the five most common business organizations -Subchapter C corporations, Subchapter S corporations, partnerships, limited liability companies (LLCs), and sole proprietorships.
- Identify the purpose and key elements of a single purpose entity (SPE) and assess the differences in its financial statements from those for a real estate partnership with numerous income-producing properties.
Materials(access provided with registration)
- Credit Refresher on The Credit Write-Up
- Financial Regulators' Policy Statement on Prudent Commercial Real Estate Workouts
- Financial Statements for Sequoia Properties
- Excerpts from Sequoia Properties' Credit Narrative
- Exercise for the Session 1 Webinar
- Webinar Presentation Slides
- Webinar Poll Questions
- Webinar Poll Solutions
- Exercise Solutions
This is Course 1 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
