Your job description says you are responsible for underwriting complex commercial real estate loans. What does that mean exactly?
Underwriting complex commercial real estate transactions involves reviewing various types of financial information and project development budgets. These transactions could relate to underwriting acquisition, development and construction loans (primarily subdivision financing requests) to larger commercial real estate transactions involving the acquisition or refinancing of various property types including ground leases. Financial statements (pro forma and historical) are analyzed along with tenant leases and rent rolls. In addition, property appraisals and environmental reports need to be ordered and reviewed.
What is the market like right now for commercial real estate loans? Are such loans readily available? Are businesses willing to take out those loans right now?
As with the national economy, Connecticut is also experiencing a slow down in general economic activity. Not surprisingly, this contraction has also impacted the growth of the commercial real estate sector in the state. Although this situation should be viewed as being temporary, bankers are understandably being cautious. We can assure you that our bank has money to lend to qualified local consumer and commercial borrowers.
In many areas across the country (especially out West) construction loans have become the fastest-growing category of troubled loans for some banks? Is that a problem for Connecticut banks as well?
In general, Connecticut appears to be satisfactorily managing its level of troubled construction loans at this time relative to some of the other geographic areas mentioned recently in the newspapers. Unlike other parts of the country, Connecticut did not over build and produce excess inventory of housing or commercial space. Very little, if any, real estate was developed for speculative purposes. Those states generally experienced a rapid influx of residents over the past few years which required a sharp increase in the housing stock. As the general economy slowed down, many of these projects were not as financially viable as originally envisioned. When the economy starts to improve, Connecticut should be well-positioned to move ahead due to its diversified economic base and income levels.
