9 Class Hours
Instructor: Richard Hamm
*Level 1 – Fundamentals of Commercial Real Estate Lending
Commercial real estate (CRE) loans continue to be one of the largest asset categories for banks and a key driver of bank income. This elective is designed to provide an overview of the CRE lending process for bankers that are new to lending or are based in other, non-lending functions of the bank.
- Distinguishing between types of real estate loans (residential to commercial)
- Identifying key differences in structuring and analyzing various RE loans
- Developing a basic cash flow (from a case exercise) to demonstrate issues with lease and expense structures
- Explaining how a capitalization (cap) rate connects CRE cash flow to market value
- Identifying non-financial risks in CRE lending
- Differentiating a CRE analysis and underwriting based on major property types
The course also will provide an overview of the various guidelines and typical practices with appraisals and environmental due diligence.
*Level 2 – Advanced Real Estate Lending
Designed for experienced commercial real estate (CRE) lenders, this elective focuses on portfolio risk components, current trends and issues at a general level, as well as underwriting standards for specific property types. Participants will share best practices and approaches to stress-testing at the transaction level, plus break-even calculations and supportable loan amounts.
Other objectives of this course include:
- Describing the key inputs and factors that influence capitalization (“cap”) rates
- Discussing/providing examples of CRE non-financial risks
- Identifying approaches to controlling construction risk and dealing with cost overruns
- Describing issues encountered with complex CRE leases and best practices for mitigating the risk(s)
This course also will provide an overview and discussion of valuation options in addition to appraisals, current issues in environmental due diligence, plus other documentation items such as title insurance and surveys.
*GSBC will assign placement based on information collected in the registration survey.
Annual School Session
Second Year Elective Course