1. Financing Commercial Real Estate

2. Market Participants Capital Supply – Insurance companies – Pension funds – REITs – Investors Capital Demand – Investors – Developers

3. Financial Innovation Participation mortgages Securitization Commercial mortgage backed securities (CMBS)

4. Lending Process Application Underwriting Commitment Closing

5. Application Package Purpose Type of loan Information – Investor – Property

6. Underwriting “Analysis of Risk” Property analysis – Appraisal – Pro forma – Review of title Borrower analysis – Financials – Experience/relationship

7. Underwriting Cont. Lease analysis – Tenant credit/financial info. – Length of leases – Lease expirations – Tenant mix – Other clauses

8. Underwriting Criteria Underwriting ratios – LTV – DCR Property description – Use – Size – Quality – Age Recourse vs. non-recourse

9. Commitment Offer of loan Terms (depend on underwriting) – Maturity – Mechanics – Fees (late, prepayment, underwriting) – Other requirements Covenants – Negative – Financial

10. Closing Completion of deal Documentation – Promissory note – Mortgage Post-closing – Servicing of the loan – Payments