Education Seminar

Commercial Real Estate Lending & Appraisals
Hyatt Regency Newport Beach

Despite the recent downturn, commercial real estate (CRE) loans remain an important component of bank loan portfolios, and many of our commercial and Industrial (C&I) business owners have significant CRE investments.  This two-day program demonstrates (from case studies) the key variables and concepts for determining CRE cash flow and the key components of CRE appraisals and the review process involved.

The following topics will be covered during this comprehensive seminar:

  • Net operating income (NOI) concepts and key variables:  vacancy, management fees and replacement reserves
  • Capitalizing the NOI to estimate and update property values, plus how cap rates work
  • Transaction-level stress-testing of debt service coverage (DSC) and loan-to-value (LTV)
  • Non-financial risks in CRE lending
  • Unique characteristics of the major types of commercial real estate
  • Issues in compiling cash flows of multiple properties
  • Reviewing leases for cash flow, legal/business and lender issues
  • Brief overview of current regulatory requirements for CRE Appraisals
  • Types of reviews: Administrative/compliance, technical/internal, or third party, with sample review checklists
  • Key appraisal components
    • Letter of transmittal
    • Property identification and ownership interest (fee simple vs. leased fee)
    • Highest and best use
    • Approaches to value
      • How the cost approach works
      • Income approach and two methods
      • Sales comparables and examples/issues
      • Reconciliation of values and value conclusion
      • A sample technical review checklist
  • Outside/third party review sample comments
    • How appraisers self-regulate via the Uniform Standards of Professional Appraisal Practice (USPAP) and state licensing
    • Getting another appraiser to do the review under USPAP 3 guidelines
  • Appraisal review outcomes: When to request revisions
  • Using your analysis to validate existing or older appraisals, with a suggested format for documenting your conclusions
  • Overview of guidelines for evaluations when an appraisal is not required

Agenda

The program will begin at 8:30 a.m. with breakfast and registration beginning at 7:30 a.m., and lunch around noon. We will conclude by 4:30 p.m. on day one and 3:30 p.m. on day two

Day One

8:30
Introduction and CRE cash flow components and variables

10:15
Break

10:30
Case Study #1 – Smith Apartments

11:30
Cap Rates

12:00
Lunch

12:45
Non-Financial Risks in CRE Projects

1:25
Differentiating Property and Project Types, including Specialty Properties

2:05
Group Exercise: Specialty Properties

2:45
Break

3:00
Case Study #2 – Johnson Office Building and Non-Financial Risks

4:00
Issues with Multiple Properties and Global Analysis

4:30
Close

Day Two

8:30
Analyzing Leases and Extraordinary Lease Terms

9:10
Moving to Appraisals: Overview of Current Regulations in Place

9:50
The Review Process and Administrative Compliance Reviews

10:30
Break

10:45
Key Appraisal Components and the Technical Review Process

12:00
Lunch

12:45
Key Appraisal Components (cont.). including the Approaches to Value

1:45
Third Party Review and Sample Comments

2:15
Break

2:30
Appraisal Validation and Issues with Evaluations

3:00
Review Outcomes and Revised Reports

3:30
Close

Audience

CRE lenders, commercial lenders, portfolio managers, credit analysts, mortgage lenders, private bankers, small business lenders, loan review specialists, special assets officers, lending managers and credit officers involved in the CRE lending process.  Also intended for support personnel involved in the ordering and reviewing of commercial appraisals.

Speaker

Richard Hamm has been training bankers for 23 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.  His clients include:

  • National associations such as the American Bankers Association (ABA) and the Risk Management Association (RMA)
  • Regional banking schools such as the Barret School of Banking – Memphis, the Graduate School of Banking – Wisconsin, the Southwestern Graduate School of Banking – Dallas, the Graduate School of Banking at Colorado and the Western States School of Banking
  • State banking and community banking associations in nine states
  • Individual banks

Richard is based in Huntsville, AL and has owned/operated Advantage Consulting & Training for 9 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, and holds the CTP (Certified Treasury Professional) designation.

Registration Fees

Early-Bird Registration through Friday October 3, 2014
CBA Member: $795
Non-Member: $995

Regular Registration
CBA Member: $995
Non-Member: $1,195

Cancellation & Complaint Resolution Policy

Substitutions are allowed, at no additional cost. Written notice is required for all substitutions/cancellations. The full registration fee will be refunded if written notice is received by October 10, 2014 and 50 percent if by October 17. No refunds will be provided after October 17.  Registrations made on or after October 17 are not subject to refund.

If for any reason you are not fully satisfied, please contact Laurie Eaton at (916) 438-4433.

Location Information

October 29 – 30, 2013
Hyatt Regency Newport Beach

1107 Jamboree Road
Newport Beach, CA 92660
(949) 729-1234

CBA has arranged a special room rate of $149 per night.  Please contact the hotel at (888) 421-1442 to reserve and reference the California Bankers Association by September 23, 2014 or click the link to make your reservations online: https://resweb.passkey.com/go/CREL

Credit Information

Program Level: Intermediate

Prerequisites: None

Advance Preparation: None

Method of Presentation: Group – Live (Lecture, Discussion, and Case Study)

Estimated CPE Credits: 15.0 Hours Maximum
Sponsored learning activities are measured by program length, with one 50-minute period equal to one CPE credit.  One-half CPE credit increments (equal to 25 minutes) are permitted after the first credit has been earned in a given learning activity.  Please note that not all state boards have adopted this rule.  Some participants may not be able to use one-half credit increments.

Commands