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Commercial Real Estate Lending II: Underwriting

Course Overview

Commercial Real Estate Lending II: Underwriting provides a best practices approach to quantifying cash flows of various styles of Commercial Real Estate (CRE) property for underwriting. Topics include 1) the analytics necessary for a unified analysis for loan consideration, including measuring cash flow for debt service and assessing quality of its sources, 2) the lease review process 3) alternative methods to reach a valuation, 4) testing loan performance under adverse conditions, and 5) creating a loan structure that helps preserve cash flow.



7.5 hours


Instructor-Led Online

Program Level




Participants are expected to have a basic understanding of commercial real estate lending and loan underwriting or to have completed RMA’s Commercial Real Estate Lending I: Introduction or Real Estate Lending Academy



Who Will Benefit?

Commercial Real Estate Lending II: Underwriting is designed for practicing commercial loan officers and other lending or credit professionals who need to understand more complex real estate lending concepts. In general, these bankers should have two to three years of experience. The course is also appropriate for credit analysts or lenders who have completed RMA’s Commercial Real Estate Lending I: Introduction and RMA’s Real Estate Lending Academy.


Learning Objectives

Upon completion of this course, participants will be able to:

  • Name inherent risks to CRE loan performance and apply strategies to discover and quantify these risks.
  • Interpret the economic and business characteristics of a lease and explain how those characteristics influence both expected net cash flow and lending risks.
  • Describe an appraiser’s valuation process for a commercial real estate property, including variances that can be caused by property performance, and the challenge in using market valuation for owner-occupied properties.
  • Analyze extraordinary lease terms and apply effective-rent analysis to quantify their impact on cash flow and value.
  • Perform breakeven, stress, and sensitivity analyses to test loan performance under adverse conditions.
  • Apply best practices for loan structure terms and covenants to support the primary drivers of CRE performance.


The predominant instructional strategy used in the course is discussion, augmented with large and small group exercises and activities. Lectures are kept to a minimum and used only when the information to be presented is outside the participants’ experience. Case studies allow participants to apply concepts learned to real problems.

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