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CRE Appraisals: Components, Approaches to Value & Cap Rates

This program provides an overview of the key components of Commercial Real Estate (CRE) appraisals. It will cover where bankers can find important information to assist in underwriting and in understanding the sustainability of cash flow and stability of the property's value.

OnDemand
Recorded Monday,
February 5th, 2024
Presented by Richard Hamm
2h total length
$299.00 or 1 Token

Includes: 30 Days OnDemand Playback, Presenter Materials and Handouts

  • Commercial/Business Lending
  • Lending
  • Mortgage Lending
  • Commercial Lender
  • Credit Analyst
  • Loan Operations Manager/Specialist
  • Mortgage Lender
  • Private Banker
  • Senior Management
  • Small Business Lender
  • Workout Specialist/Collector

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Commercial Real Estate (CRE) appraisals can be lengthy and very detailed. Want to navigate to key sections quickly? Want to understand key areas of lending focus (beyond the value conclusion), both in terms of reviewing the report and making use of its conclusions? As banks continue to deal directly with CRE loans as a major portion of their loan portfolios, plus indirectly through income-producing or rental real estate holdings that affect customers, it is important to understand the key sections of the report and the terminology used. For example, there can be a critical difference between providing a value based on fee simple interest versus leased fee interest. Stepping away from all the rules and regulations, this program focuses on the “nuts and bolts” of the report itself.

What You'll Learn

  • Types of appraisals by format
  • What to look for within the assumptions and limiting conditions
  • Property ownership interests clarified (fee simple, leased fee, etc.)
  • Highest and best use of the property
  • Approaches to Value
  • Cost approach and information useful in the underwriting and loan structuring process
  • Income approach options of discounted cash flow (DCF) and direct capitalization, with the steps to building net operating income (NOI) and the drivers of cap rates used in direct capitalization
  • Comparables and the key issue to consider when selecting and evaluating comps
  • Reconciliation of value

Who Should Attend

CRE lenders, commercial lenders, private bankers, small business lenders, credit analysts, portfolio managers, assistant relationship managers, consumer and mortgage lenders, loan review specialists, special assets officers, lending managers, credit officers, and CRE support personnel will benefit from this course.

Richard Hamm

Instructor Bio

Richard Hamm has been training bankers for 28 years, designing and delivering courses specializing in commercial lending and credit, including portfolio and risk management, commercial real estate (CRE) and appraisals, plus selling and negotiating skills, and director training. He also conducts eight senior lender forums on a periodic basis in multiple states and one series at the national level.

He is based in Huntsville, AL and has owned/operated Advantage Consulting & Training for 14 years, after a 22-year banking career including senior positions in lending and credit, plus president of a community bank through formation and acquisition of an existing bank. He has BS and MBA degrees from the University of Alabama.

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