Helping Financial Institutions Manage Credit Risk Since 1984

Managing risk in the CRE portfolio will be paramount in 2025.

Here are 3 things you can do now to control this risk:

Our Company saw an over 50% jump in appraisal review services so far in 2025, which is a good indication that CRE lending is on the rise. Let TGA review your appraisals to ensure USPAP requirements are met. We have a team of highly qualified, licensed appraisers that are experts in the field and ready to support you.

Be careful when approving too many CRE loans based on projections. The Credit Team should always strive to obtain historical cash flow on existing income-producing properties. Closely track all loans approved based on projections on an internal report until you have fiscal year-end financial statements or tax returns to support the projections. Set a goal to limit these loans as a percentage of your capital.

Management and the Board should know which income-producing commercial real estate (IPCRE) collateral properties are not generating sufficient NOI to service their related debt. A report aggregating the total exposure of all these loans should be maintained and compared to the Bank's capital. If the percentage is high, have your Credit Team look at strategies to mitigate the risk posed by these loans (i.e., consider obtaining additional collateral until the subject property does cash flow).

Contact us to learn more!