: Develops and analyzes financial and accounting
information relating to borrowers’ financial condition; prepares and maintains credit
standings of current borrowers; furnishes information in response to credit inquiries
: Commercial Real Estate Analyst
, Real Estate
Finance Credit Analyst
: $45,000 to $60,000 and up
Education or Training
—Four-year degree with concentration in accounting, business, or finance
—Two to five years’ experience in commercial real estate
Special Skills and Personality Traits
—Working knowledge of commercial real estate underwriting
Commercial Real Estate Credit Analysts evaluate credit quality of mortgages, commercial loans
, and consumer loans and assign risk ratings. They perform in-depth credit analysis of new and existing real estate financings. They evaluate the credit risk associated with office buildings and other commercial properties. They develop and analyze financial and accounting information relating to borrowers’ financial condition, prepare and maintain credit standing reports of current borrowers, and respond to credit inquiries from banks or real estate investors. They work with the real estate transaction team from the initial bid, or loan request, to loan closing
by the loan committee. They assist other members of the lender
’s credit department and loan officers
Credit analysts also examine loan portfolios for compliance with internal or external credit and risk management
guidelines. They work in the audit department or credit department of financial institutions
and commercial finance companies. They perform due diligence
financial analysis of borrower-submitted information to determine how much the bank can reasonably lend, based on the borrower’s credit history, collateral, and ability to repay. They prepare executive summaries for presentation to the loan underwriting
team or to the loan committee.
Credit analysts identify problem loans, such as past-due loans and loans with insufficient collateral. They write up a summary of their analysis if loan repayment becomes doubtful and report these findings to the bank’s asset-liability
committee, senior loan committee, and board of directors. They may also act as senior credit analysts and coordinate credit reviews of commercial loans. Banks rely on the data gathered by the loan review analyst in calculating their loan loss reserves (funds set aside to cover possible loan losses) as required by federal banking
Commercial Real Estate Credit Analysts may do any or all of the following:
*review preliminary financing packages, perform cash flow analysis, and structure financing
*participate in property inspections with the underwriting team, assisting in evaluating a specific property, its competition
and the overall market
*assist the underwriter in drafting a narrative describing the asset, location, market, financial performance, and borrower’s business plan
*evaluate third-party reports on property condition, environment, and property appraisal
to identify potential issues or areas requiring further investigation
*perform ad hoc analysis and other reports as requested by the loan underwriting team
*provide analytical support for deal origination and new business development
Commercial credit analysts work in an office setting and typically work long hours. A 40- to 50-hour workweek is typical. Occasional travel may be required to inspect a borrower’s property or examine loan collateral.
Salaries of Commercial Real Estate Credit Analysts usually range from $45,000 a year for individuals starting their career to $60,000 or more. Analysts employed in the larger banks, which typically approve the multimillion-dollar loans to real estate developers, can earn $100,000 or more. They may also earn a performance bonus tied to the success of the department or the lender’s overall performance and return on assets
in a particular year.
Prospects Employment opportunities will grow as the economy expands, increasing the demand
for workers with financial expertise. There are ample employment opportunities for individuals with some experience in a credit analysis, commercial lending, or loan collection and loan workout. Some financial institutions hire recent college graduates as trainees for entry-level positions in loan analysis or loan review departments.
However, the job market for credit analysts is very competitive. The number of job openings is expected to be less than the number of applicants. Candidates with expertise in accounting and finance, particularly those with a master’s degree, should enjoy the best job prospects.
The real estate market is very cyclical, tending to expand or contract
in step with the overall economy. This economic linkage may cut into employment opportunities for credit analysts, as happened during the 2007–08 “credit crunch”—a period when banks curtailed their lending activity to limit their potential write-offs stemming from overbuilding in the residential housing market.
Commercial loan analysts can advance to management
positions, such as manager of the loan review department. Other advancement options
might be moving to positions of increased responsibility, such as loan workout manager or manager of the credit and collections department. Advancement to more senior positions may require upgrading job skills to stay current with industry trends and changes in banking regulation. Credit analysts can improve their advancement prospects by taking continuing education
courses or getting an advanced degree. Many firms pay all or part of the costs
for employees who successfully complete a post-graduate academic program. Although experience, ability, and leadership
are emphasized for promotion
, advancement can be accelerated by having an advanced degree. Some higher level positions may require a master’s degree in finance, risk management, or a related area.
Education and Training
A bachelor’s degree in finance, accounting, or a related field of study is the foundation academic preparation for a career as a credit analyst. Recently, however, employers increasingly seek graduates with a master’s degree in business administration, economics
, finance, or risk management. These academic programs develop analytical skills and provide knowledge of the latest financial analysis methods and technology.
Continuing education is vital for financial managers
, who must cope with changes in federal and state laws and regulations and new financial instruments. Firms often provide opportunities for workers to broaden their knowledge and skills by encouraging employees to take graduate courses at colleges and universities or attend conferences related to their specialty. Some colleges and universities offer distance learning, or online, graduate degree programs, which may be an option
for those who want to upgrade their skills while holding down a full-time job.
Experience, Skills, and Personality Traits
Individuals should have at least one year’s experience in commercial underwriting, depending on the specific position requirements, or related work experience. Good decision-making skills and problem-solving skills are essential in this position. Some prior experience as a loan officer or loan workout officer working on delinquent or past-due loans is a good stepping stone to a career as a credit analyst. Some experience in multifamily or federally insured residential loans, hotel, and mixed-use development can be very useful background.
Credit analysts need to have excellent written and verbal communication skills, as they often are required to make presentations to a loan committee comprised of senior loan officers.
Analysts should be detail-oriented, with in-depth analytical aptitude and strong knowledge of Excel spreadsheet program and ARGUS real estate database software
Unions and Associations
Commercial credit analysts can become members of several professional associations, including CoreNet Global and banking associations such as the American Bankers Association for networking
and career advancement opportunities.
Tips for Entry
1. Get some on-the-job experience in banking by working part-time in a branch office or loan department while attending college.
2. Take courses in accounting, business administration, or finance or courses to improve your computer skills working with spreadsheet accounting programs.