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