Banks continue to deal with commercial real estate (CRE) loans as a major portion of their loan portfolios. Also, many borrowers still have large holdings of income-producing or rental real estate. Whether directly financing these assets or including the income stream(s) in your overall credit analysis, it is important to understand key analytical concepts utilized in evaluating CRE cash flow.
This program covers the key variables and concepts for determining CRE cash flow and transaction-level stress testing. We'll learn that CRE cash flow involves more than earnings before interest, taxes, depreciation, and amortization (EBITDA) for a debt service coverage (DSC) and that we should be using the updated cash flow to help update the underlying collateral value as part of ongoing loan monitoring. Making the connection between an updated cash flow and an updated value estimate involves a capitalization (cap) rate.
Who Should Attend
Commercial lenders, credit analysts and small business lenders, consumer lenders, mortgage bankers, and private bankers will benefit as well as loan review specialists, special assets officers, lending managers and credit officers.