CRE Appraisals: Components, Approaches to Value & Cap Rates

Date:

Jun 24, 2024

This program provides an overview of the key components of CRE appraisals and where bankers can find important information to assist in underwriting and understanding the sustainability of cash flow and the stability of the value of a property.

Commercial real estate (CRE) appraisals can be lengthy and very detailed. Want to navigate to key sections quickly? Want to understand key areas of lending focus (beyond the value conclusion), both in terms of reviewing the report and making use of its conclusions? As banks continue to deal directly with CRE loans as a major portion of their loan portfolios, plus indirectly through income-producing or rental real estate holdings that affect customers, it is important to understand the key sections of the report and terminology used. For example, there can be a critical difference between providing a value based on fee simple interest versus leased fee interest. Stepping away from all the rules and regulations, this program focuses on the “nuts and bolts” of the report itself.