Commercial Real Estate Lending: Property Types, Lease Structures and Other Non-Financial Risks
Recorded Tuesday, June 27, 2017
1:30 pm – 3:30 pm CT
Recommended for 2.5 CE Credits
Commercial and industrial (C&I) lenders know that non-financial factors such as the borrower’s industry, its competitive market, and its management team play a key role in the ongoing success of the business, as well as timely loan repayment. Commercial real estate (CRE) loans have similar non-financial factors or issues, including the type of property (similar to C&I industry risk), ability to successfully re-lease the property over the loan term (competitive market), and proper management and maintenance of the physical facility.
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 “get beyond the numbers” and assess the qualitative or non-financial factors that influence CRE performance over time.
If you are also interested in our CRE Lending: Cash Flow Analysis & Cap Rates webinar on May 18th, 2017; See series flyer for discounted package pricing.
- Differentiating among property types – key terminology and operating factors for multi-family, retail, office and industrial/warehouse
- Additional issues with owner-occupied and “specialty” properties, such as hotels and nursing homes
- “Triple net” versus full service leases
- Overview of other common provisions in commercial leases, including
- Reimbursement for common area maintenance (CAM)
- “Go dark” clauses
- Cotenancy clauses
- Requirements placed on the tenant
- Requirements placed on the landlord
- Subordination, non-disturbance and attornment provisions
- Unusual or extraordinary lease provisions, such as building naming rights
- Re-lease and rollover risk
- Physical style risk and ongoing property management risk
- The concept of sponsorship
Who Should Attend:
Commercial lenders, credit analysts and small business lenders, consumer lenders, mortgage bankers and private bankers; loan review specialists, special assets officers, lending managers and credit officers.
Richard Hamm has been training bankers for 25 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.
Richard is based in Huntsville, AL and has owned/operated Advantage Consulting & Training for 11 years, after a 22-year banking career including senior positions in lending and credit, plus president through formation and acquisition of a community bank. He has BS and MBA degrees from the University of Alabama.