4 Traits to Look for in a Lease Abstraction Firm

A lease abstract can be a vital tool for many players in the commercial real estate arena. But, with so many intricate details at play —and with very critical business decisions resting on the information contained in the report— partnering with a reputable lease abstraction firm can mean all the difference in your success.

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Is Business Process Outsourcing Relevant for Your CRE Business?

The convergence of technology and globalization has changed the way that we do business. Every industry — from healthcare to automotive to commercial real estate — has been impacted as new opportunities in the global marketplace continue to emerge. One resulting trend is business process outsourcing (BPO).

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Your Story Coverage for Integrand Analytics

Integrand Analytics taps niche Wall Street market out of India.

CMBS is one of the most popular avenues for investors to gain exposure to older commercial real estate debt and for banks to free up money that is tied up in these loans. So, hundreds of real estate loans are bundled together and traded as a single instrument. This kind of complicated investment requires intensive analytics as well as due diligence of the loans that are being bundled together.

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CMBS DEAL STRUCTURING TOOL (EXCEL VERSION)

CMBS Deal Structuring Tool
  • The CMBS Structuring tool provides a powerful and efficient system to structure and reverse engineer CMBS deals

  • The model is adept at handling most CMBS deal structures and is a one-stop tool for analyzing collateral and bond cash-flow under multiple scenarios and calculating deal profitability

  • Our CMBS structuring tool is capable of encoding rating criteria from the concerned rating agencies and provide you with a fast, easy and efficient way to obtain comprehensive measures in order to check the quality of collateral against required rating parameters.

  • The model is powered by our proprietary cash-flow engine which also provides detailed note level cash-flow for companion loan structures.

  • The structuring tool will provide a user-interface to design the deal waterfall and run bond cashflow under different assumptions and stress scenarios to test the required credit enhancement level for each bond. Finally, the bond pricing screen will calculate parameters like yield, WAL, Yield, duration, principal-window etc.

  • Tool’s user-interface provide users with detailed Price/Yield analysis, deal pricing and generating stratification reports
Model Screenshots

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For investors in CRE Loan Pools

Loan Scoring - PD LGD Model (Stochastic Approach)
  • Loan Score Based Default Vectors - Each commercial real estate loan and property is evaluated on multiple parent criteria like Payment and Capital, Property Parameters; each of which is assigned different user-defined weights. Each such category contains sub-categories with weight factors and is assigned scores on a scale of one to ten. The final weighted average loan score is used to pick a set of appropriate CPR and CDR rates which are used to generate stressed loan cash flow.

  • Probability of Default (Stochastic PD-LGD model) - This method uses a stochastic Jump-Diffusion Process to project the future path of property Net Operating Income (NOI). The drift rate takes into account systematic factors like sector outlook for short and long-term rental growth rates, average income volatility and is an input based on property type and geography. The drift rate and volatility is further adjusted to integrate the effects of idiosyncratic factors like property specific occupancy rates, income per unit (compared to market average), build and renovation years. The jump process introduces infrequent jumps of much larger magnitude in the projected NOI path and mimics sudden rise or drop in income due to changes in property vacancy, capital expenditures etc.

  • Default Triggers - DSCR and LTV are used in conjunction as the trigger variables. LTV is calculated based on simulated property prices using Ito drift-diffusion stochastic process. The loan is defined to enter into a state of default if both DSCR and LTV ratios drop below their threshold N number of times in an interval of X periods.

  • Loss Given Default -Loss is calculated as outstanding loan balance at default less the simulated appraised property value. The loss rate is further stressed based on loan size and property quality score. An average LGD percentage is calculated for all simulation runs leading up to a default.

  • Expected Loss -Finally, expected loan loss is calculated for each loan using the results of n simulations to predict PD and LGD. The expected loss (EL) is calculated as a PD x LGD for each loan.

Model Screenshots

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Get in touch: contact@integrand.in

LOAN SIZING AND ASSET SUMMARY REPORT SUPPORT OUTSOURCING

Loan Sizing and Loan Origination Support
Preliminary Loan Sizing
  • CMBS loan origination and detailed underwriting by analyzing the property operating performance, tenant analysis, borrower analysis and loan analysis.

  • Incorporating and analyzing property operating statements and performing re-underwriting based on cash-flow analysis.

  • Loan Sizing includes pre-screening underwriting.

Asset Summary Report and Loan Application Preparation
  • Market Summary Write-up

  • Loan Summary Write-up

  • Property Summary Write-up

  • Roll-over analysis

  • Strength/Weakness analysis

  • Incorporating other additional annexure if required by clients

Asset Summary Reports strengthen the due-diligence process and provide the management/lender with summary of all crucial aspects about the borrower and property, helping them make informed decisions.

During the preparation of Asset Summary Reports, a checklist for all the required documents are maintained and followed. All the leases are abstracted in house and financial information is populated in excel based of Argus.

Detailed analysis of property, neighbourhood, market and third part reports is performed and all other material points are considered and incorporated in the report.

Detailed SWOT analysis is performed on property, loan and borrower level.

Expertise with all types of Commercial properties.

Services include DCF model creation, conversion, updates & audits as well as electronic creation of models utilizing data from other systems. Various reports and schedules are available as end product such as Cash flow, tenant roll-over, operating income expenses and others.

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Get in touch: contact@integrand.in

PROPERTY FINANCIAL UPDATE AND FINANCIAL STATEMENT ANALYSIS

Loan Sizing and Loan Origination Support
Loan Sizing

Property Financial Update: Updating current quarter/annual property financial data in their respective income heads and categorizing each line items as per the guidelines provided by client’s accounting process. Analyzing their loan and property portfolio characterisitcs and helps in investors/lenders asset management activities.

Financial Statement Analysis: Analyzing financial statements of commercial & multifamily properties on annually, quarterly and monthly basis against which the loans have already been originated.

Loan Servicing: Complete analysis for the Originated loans in US Real Estate Mortgage for Underwriting management, Operating Statement analysis, DSCR analysis, Quality re-rating analysis for Multifamily and Commercial properties.

Rent Roll analysis: Analyzing and updating the current occupancy status over the property.Trend Analysis: Conducting comparison in between two or more year’s financial data (Income and various expense heads).

Trend Analysis: Conducting comparison in between two or more year’s financial data (Income and various expense heads).

Services include DCF model creation, conversion, updates & audits as well as electronic creation of models utilizing data from other systems. Various reports and schedules are available as end product such as Cash flow, tenant roll-over, operating income expenses and others.

Request Demo

Get in touch: contact@integrand.in

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Recent Posts

Integrand Taps Niche Wall Street Market Posted: 1 month ago Posted By: Integrand Analytics
CMBS DEAL STRUCTURING TOOL Posted: 9 month ago Posted By: Integrand Analytics
For investors in CRE Loan Pools Posted: 10 month ago Posted By: Integrand Analytics
LOAN SIZING AND ASSET SUMMARY REPORT SUPPORT OUTSOURCING Posted: 11 months ago Posted By: Integrand Analytics
PROPERTY FINANCIAL UPDATE AND FINANCIAL STATEMENT ANALYSIS Posted: 11 months ago Posted By: Integrand Analytics

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