Appendix B — Commercial Mortgage Checklist

Appendix ID: commercial-mortgage-checklist

Transaction and ownership

• [ ] Acquisition / refinance / construction / bridge / partner buyout identified
• [ ] Borrowing entity and property-owning entity confirmed
• [ ] Articles, profile, directors and beneficial owners verified
• [ ] Borrowing resolution and signing authority obtained
• [ ] Related entities and guarantees mapped
• [ ] Purchase, buyout or refinance agreements executed
• [ ] Sources and uses reconcile to requested loan
• [ ] Existing debt and payout statements complete

Sponsor

• [ ] Personal net-worth statement signed and supported
• [ ] Liquidity after closing calculated
• [ ] Credit reports and payment history reviewed
• [ ] Real-estate/business experience summarized
• [ ] Contingent liabilities and guarantees disclosed
• [ ] Tax balances and litigation disclosed
• [ ] Equity contribution verified
• [ ] Guarantor capacity and ILA requirements identified

Property income

• [ ] Current rent roll dated and signed
• [ ] Material leases and amendments obtained
• [ ] Rent deposits reconcile with rent roll
• [ ] Arrears, vacancy and concessions identified
• [ ] Tenant concentration calculated
• [ ] Lease rollover schedule prepared
• [ ] Related-party rent adjusted to market where required
• [ ] Other income supported
• [ ] Three-year operating history obtained where available
• [ ] Current YTD operating statement obtained
• [ ] Stabilized NOI calculated

Expenses

• [ ] Property taxes
• [ ] Insurance
• [ ] Utilities
• [ ] Repairs and maintenance
• [ ] Management allowance
• [ ] Administration/security/cleaning
• [ ] Landscaping and snow
• [ ] Replacement reserve
• [ ] Leasing commissions and tenant improvements
• [ ] Deferred capital expenditure
• [ ] Expenses reconcile with statements/tax records

Loan sizing

Property due diligence

• [ ] Commercial appraisal ordered through accepted channel
• [ ] Current/as-is/as-completed values distinguished
• [ ] Zoning and legal use confirmed
• [ ] Phase I ESA current and lender reliance available
• [ ] Phase II/remediation completed where required
• [ ] Building condition/capital plan reviewed
• [ ] Survey/site plan/access reviewed
• [ ] Insurance quotation and permitted use confirmed
• [ ] Property management acceptable
• [ ] Major contracts and service agreements reviewed

Approval and legal

• [ ] Indicative terms are not treated as final approval
• [ ] Commitment fees and deposits understood
• [ ] Covenants summarized
• [ ] Guarantees and environmental indemnity summarized
• [ ] Assignment of rents/leases understood
• [ ] GSA and other collateral identified
• [ ] Corporate legal opinions required
• [ ] Tenant estoppels/SNDAs required
• [ ] Payout, discharge and priority agreements coordinated
• [ ] Closing conditions tracker complete

Commercial credit summary

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