Business Financing - Commercial Real Estate Loan Underwriting Analysis

Commercial Real Estate Loan Underwriting Analysis


Please enter the information highlighted in yellow.





Loan and Property Information:

Amount of Loan:
Loan Term Years (balloon):
Amortization Period (years):
Annual Interest Rate:
Capitalization Rate:
Payments per Year:
Total Purchase Price:
Required Debt Service Coverage:
Market (or Appraised Value):
Gross Annual Income:
Net Operating Income:
Gross square feet of improvements:
Net usable square feet improvements:
Cash equity:
Total Acres in Project:
Current Occupancy Percentage:
Stabilized Net Occupancy Percentage:
Tenant Contribution to Expenses:
Total Annual Tenant Concessions:
Square feet of anchor tenants:
Total number of anchor tenants:
Square feet of local tenants:
Total number of local tenants:
Total years remaining on anchor tenant leases:
Total years remaining on local tenant leases:
Square feet of anchor tenant space that expires before loan balloon:
Average percent of rent escalations:
Total parking spaces:


Summary Analysis of Underwriting Requirements

Maximum loan supported by required debt service coverage:

Loan to value:

Loan to purchase price:

Annual debt service payment:

Debt service coverage :

Periodic debt service payment:

Mortgage (or loan) constant:

Balloon payment:

Interest until balloon:

Principal until balloon:

Total Payments until balloon:

Value by capitalization:

Loan per gross sq. feet improvements:

Loan per net usable square feet of improvements:

Gross income per net usable occupied square foot:

Net operating income per net usable occupied sq ft:

Expenses:

Expenses per net occupied sq. foot:

Efficiency (improvements):

Gross square feet of land:

Floor area ratio:

Break even at stabilized occupancy:

Break even at stabilized rent:

Tenant contributions to expenses per net occupied square foot:

Percent of anchor tenants:

Average years remaining on anchor tenant leases:

Blended anchor tenant coverage to loan term:

Average sq ft of local tenant leases:

Average years remaining on local tenant leases:

Loss of net operating income at maximum anchor tenant lease fallout:

Remaining net operating income on retained tenant base:

Average annual anticipated net operating income on retained tenant base:

Total tenant concessions per net usable occupied square foot:

Effective annual net operating income:

Effective net income per net occupied square foot:

Debt service coverage on effective net income:

Stabilized vacancy percentage:

Net usable square feet of vacancy:

Gross income of vacancy:

Total parking spaces for each 1000 net usable square foot:

Cash Flow:

Cash on cash return:



Detailed Analysis of Underwriting Requirements

Maximum loan supported by required debt service coverage:
(effective net operating income / required debt service coverage
/ mortgage constant)

Loan to value:
(amount of loan / market or appraised value)

Loan to purchase price:
(amount of loan / total purchase price)

Annual debt service payment:
(amount of loan X mortgage constant)

Debt service coverage:
(net operating income / debt service)

Periodic debt service payment:
(annual debt service payment / payments per year)

Mortgage (or loan) constant:
(annual debt service payment / amount of loan)

Balloon payment:
(present value of: periodic debt service payment, periodic interest rate,
& number of periods left in amortization period after balloon)

Interest until balloon:
(balloon loan term years X payments per year X periodic debt service payment)
- (amount of loan - balloon payment)

Principal until balloon:
(total until balloon - interest until balloon)

Total Payments until balloon:
(loan term years (balloon) X payments per year
X periodic debt service payment)

Value by capitalization:
(effective net operating income / capitalization rate)

Loan per gross sq. feet improvements:
(amount of loan / gross square feet of improvements)

Loan per net usable square feet of improvements:
(amount of loan
/ net usable square feet improvements)

Gross income per net usable occupied square foot:
(gross income / net usable square feet improvements
/ current occupancy percent)

Net operating income per net usable occupied sq ft:
(net operating income
/ net usable square feet improvements
/ current occupancy percent)

Expenses:
(gross income - net operating income)

Expenses per net occupied sq. foot:
(expenses / net usable square feet improvements
/ current occupancy percent)

Efficiency (improvements):
(net usable square feet improvements
/ gross square feet of improvements)

Gross square feet of land:
(total acres in project X 43,560)

Floor area ratio:
(gross square feet of improvements
/ gross square feet of land)

Break even at stabilized occupancy:
((annual debt service + expenses)
/ net usable square feet improvements
/ stabilized net occupancy percent)

Break even at stabilized rent:
((annual debt service + expenses)
/ gross income per net usable occupied sq. ft.
/ net usable square feet improvements)

Tenant contributions to expenses per net occupied square foot:
(tenant contributions to expenses
/ net usable square feet improvements
/ current occupancy percent)

Percent of anchor tenants:
(square feet of anchor tenants
/ net usable square feet improvements)

Average years remaining on anchor tenant leases:
(years remaining on anchor tenant leases
/ number of anchor tenants)

Blended anchor tenant coverage to loan term:
(average years remaining on anchor tenant leases
/ loan term years (balloon))

Average sq ft of local tenant leases:
(square feet of local tenants
/ number of local tenants)

Average years remaining on local tenant leases:
(years remaining on local tenant leases
/ number of local tenants)

Loss of net operating income at maximum anchor tenant lease fallout:
(square feet of anchor tenant space that expires before loan balloon
X net operating income per net usable occupied square foot)

Remaining net operating income on retained tenant base:
(net operating income - loss of n.o.i. at max. anchor tenant lease fallout)

Average annual anticipated net operating income on retained tenant base:
((remaining n.o.i. on retained tenant base
X (1+average rent escalation percent)
X loan term years (balloon))
/ loan term years (balloon)

Total tenant concessions per net usable occupied square foot:
(total annual tenant concessions
/ net usable square feet improvements
/ stabilized occupancy percent)

Effective annual net operating income:
(net operating income
- total annual tenant concessions)

Effective net income per net occupied square foot:
(effective net income
/ net usable square feet improvements
/ current occupancy percent)

Debt service coverage on effective net income:
(effective net income
/ annual debt service payment)

Stabilized vacancy percentage:
(100% - net occupancy percent)

Net usable square feet of vacancy:
(stabilized vacancy percent
X net usable square feet improvements)

Gross income of vacancy:
(stabilized vacancy percent
X gross income per net usable occupied square foot
X gross square feet improvements)

Total parking spaces for each 1000 net usable square foot:
(total parking spaces
/ (net usable square feet improvements / 1000))

Cash Flow:
(net operating income
- annual debt service payment)

Cash on cash return:
(cash flow / cash equity)

Automatic recalculation

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