Course Overview

The Commercial Real Estate Lending III: Global Cash Flow (CREL III: GFC) course provides participants with an analytical tool that helps to determine the probability of loan repayment on real estate transactions where the owner/investor has multiple investment real estate holdings, with varying degrees of ownership interest. By evaluating the cash flows from all investment properties in the owner/investor’s portfolio, one can analyze the global impact on the overall cash flows of the borrower, detecting cash flow weaknesses that may affect loan repayment, either from the subject property or from another unrelated property in the guarantor’s portfolio. The course focuses on how to gather relevant sources of cash flow information, and how to assemble that information in a clear and organized fashion in an effort to effectively analyze global cash flow (GCF) implications on CRE loan repayment. In conclusion, the course puts into perspective the risks inherent in the stability of the real estate portfolio’s cash flow as it relates to the borrower’s global ability to support repayment of current and future obligations.

     

Duration

7.5 hours

Delivery

Instructor-Led Online

Program Level

Intermediate

 

Prerequisites

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 II or Real Estate Lending Academy

 

 

Who Will Benefit?

Commercial Real Estate Lending III 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 II and RMA’s Real Estate Lending Academy.

   

Learning Objectives

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

• Calculate projected cash flows and gauge potential real estate portfolio risk.
• Identify a global cash flow model appropriate for investment real estate.
• Identify income and expense components and relationships to create a cash flow for a CRE property.
• Identify how tax returns are used for a property analysis.
• Compare strengths and weakness of tax returns, operating statements, pro-formas and market data in determining cash flow sufficiency.
• Demonstrate how variances in real estate markets and leasing structures can threaten global portfolio cash flow.
• Construct an investor portfolio summary to measure overall performance and potential risks.
• Construct and evaluate global cash flow and debt service where minority ownerships are involved.
• Identify how interrelated cash flows may affect and distort CRE performance measurements.

Methodology:

CREL III: Global Cash Flow actively involves participants by including large and small group activities based on a case study that is woven throughout the course materials, providing questions designed to enhance the understanding of global cash flow and its impact on the company. Participants learn by practice, which in turn increases retention. Further, practice facilitates their ability to apply the course’s content when they return to their jobs.