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Series 4: Understanding and Evaluating Leases, Appraisals and Environmental Assessments

The Commercial Real Estate Lending Decision Process and the courses in the curriculum are products of The Risk Management Association.

The purpose of this series is to help the student recognize and use lease terminology and recognize the cash flow and economic considerations of leases.  Students will be shown how to review commercial property leases, assess the role and scope of an appraisal and identify issues in reviewing appraisals. The final section of this Series 4 will assess the role and scope of an environmental assessment and identify issues when reviewing environmental assessments.  

 

Duration: Approximately 3.5 hours.

 

Audience: Commercial lenders and credit analysts who are not real estate specialists but who need to know more about assessing real estate risk.

 

Learning Objectives: After completing this course, students will be able to:

  • Identify economic, legal, and business issues in commercial property leases including key documents, lease terms, and objectives or purposes.
  • Describe the role of an appraisal in the loan underwriting process, its uses, and its limitations
  • Identify the key considerations in defining the appraisal problem and determining the scope of work
  • Determine how valuation concepts are developed and executed in a sample appraisal
  • Identify key areas of an appraisal to evaluate in the review process and common errors to watch for
  • Describe the role of an environmental assessment in the loan underwriting process, its uses, and its limitations.
  • Describe potential environmental risks and ways to mitigate those risks.
  • Identify key considerations in defining the required level of due diligence.
  • Evaluate and interpret the findings of a Phase I environmental report.

 

The courses included in Series 4: Understanding and Evaluating Leases, Appraisals and Environmental Assessments Curriculum are:

  • CRE-LDP 4.1 – Understanding and Analyzing Leases
  • CRE-LDP 4.2 – Understanding and Evaluating Appraisals
  • CRE-LDP 4.3 – Understanding and Evaluating Environmental Assessments  

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