Course Summary:
This program covers the key variables and concepts for determining commercial real estate (CRE) cash flow and transaction-level stress-testing. We'll discuss CRE cash flow factors beyond earnings before interest, taxes, depreciation and amortization (EBITDA) for a debt service coverage (DSC), and how to use cash flow to update the underlying collateral value as part of ongoing loan monitoring.
Course Details:
Financial institutions continue to deal with CRE loans as a major portion of their loan portfolios. Also, many borrowers 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.
Join us for a comprehensive discussion of cash flow or net operating income (NOI) concepts and transaction-level stress testing. We'll walk through a sample worksheet to explore the major issues, including stress testing, demonstrated with a case example.
What You'll Learn:- Understanding key variables: vacancy, management fees, and replacement reserves
- Using NOI along with a cap rate to estimate current property value
- Moving from NOI to cash flow available for debt service (CFADS) and DSC
- Stress-testing of DSC and loan-to-value (LTV) at transaction level
Copyright ABTrainingCenter.com 2025
