Tag Archives: robert sarver

ULI Arizona Shark Tank Flyer art

ULI seeking real estate proposals for ‘Shark Tank’ event

The Urban Land Institute (ULI) Arizona District Council is seeking proposals from local real estate entrepreneurs to showcase and pitch their projects at the popular ULI Shark Tank event.  Real money and expert deal making advice is at stake for successful candidates with real estate development experience, an active and interesting deal to discuss, and the ability to make a concise and captivating presentation.

 

All proposals will be evaluated by a panel of ‘sharks’ including Steven J. Hilton, Meritage Homes Corporation; F. Francis Najafi, Pivotal Group; and Robert Sarver, Western Alliance Bancorporation.  C. Joseph Blackbourn, Everest Holdings, will be the moderator.

 

The top proposals will be selected as the feature presentations at the November 5 event held at The Phoenician Resort in Scottsdale.  Presenters will gain exposure to over 200 industry professionals, including a wide array of lenders, private investors, developers, architects, and others, providing both capital and expertise to help bring their project to fruition.

 

Deadline for Submittal:            September 30, 5 p.m.

 

Submit Proposals to:                 Carrie.Martin@ULI.org

 

Requirements:   - Biography and CV of the proposed presenter

– Summary-level outline of the investment request with project description, maps, etc.

– Cover letter expressing interest in participation in Shark Tank

– Finalists will participate in two to three planning conference calls with                                                         ULI staff and the Shark Tank event moderator

 

Benefits to Presenters:   - Constructive feedback from actual real estate icons

– A thorough vetting of all high-level project plans/assumptions

– Presentation experience and practice pitching your deal

– Immediate access to the knowledgeable ULI industry leaders

– Exposure to potential capital investors in the audience

 

More Information:              www.arizona.uli.org

A Guide to Applying for a Bank Loan

Are Arizona banks lending?

Are they or aren’t they?

Banks can only stay in business by making loans, not turning away customers who want to borrow money. So why does the public believe that banks aren’t lending?

“The truth of the matter is that when things were really bad a few years ago, banks weren’t lending,” said Robert Sarver, CEO of Western Alliance Bancorporation. “The banking business, not unlike other businesses, tend to react and overreact and sometime we react too much when times are good and we lend too much money on too liberal terms, and when times are tough, we don’t lend enough money and are too conservative.”

Banks are a business — a unique kind of business — that is under significant pressure to make a profit like any other like any other business. A typical bank, in healthy years, should earn a return on assets (ROA) of 1.1 percent to 1.5 percent. That translates into an return on equity (ROE), because of leverage, of anywhere between 8 percent and 18 percent, similar to most other businesses.

A bank makes its money by investing deposits into either securities or loans, both of which earn a return. Typically, loans earn more than securities and both earn more than what banks pay out to depositors. Although loans earn more, they come with a credit loss rate that a securities portfolio generally does not have. In 2009, in the depths of the economic crisis, a typical bank had a loan loss rate of 1.73 percent on its loan portfolio, which ate into the profitability of the bank. So what does a bank to do when it incurs such high loss rates in its loan portfolio? It invests in fewer loans.

But that is changing. Banks have increased their lending for four of the last five quarters, but Federal Deposit Insurance Corporation (FDIC) acting chairman Martin Gruenberg, is still taking a ”wait and see if the trend toward increased lending can be sustained” approach.

“Banks are lending today, and most banks have excess liquidity that they would prefer to put out in loans,” said Keith Maio, president and Chief Executive Officer of National Bank of Arizona. “Those that feel that banks aren’t lending are likely those who have had their credit compromised in recent years. Loan demand is down from consumers and businesses particularly, since the recession. The recession has caused many personal borrowers to be more conservative in their approach to leverage. Businesses tend to increase borrowing when their revenues are increasing and they need to finance that growth.”

Sarver said that banks do want to lend, “but unfortunately there is a lot of regulation in our industry, which to a certain degree has stifled long-term growth because our capital requirements have almost doubled over the last five years, so that’s been another barrier to banks lending money.”

As an outgrowth of those regulatory changes, lending standards have tightened in certain consumer loan categories like mortgages, experts said. But while mortgage rules have changed, lending standards for business haven’t seen dramatic shifts.

“Commercial lending standards for owner-occupied real estate and commercial and industrial loans have not changed much,” said Kevin Sellers, executive vice president with First Fidelity Bank in Arizona. “For investment property loans, banks are requiring owners to maintain more equity capital in the properties and higher net operating income relative to the property debt service.”

According to Adam White, senior vice president of credit administration at Biltmore Bank of Arizona, bankers have always used the “Five C’s of Credit” to determine if a business is credit worthy.  Those included:
1. Cash flow – history of positive cash flows and probability of recurring
2. Collateral – adequate collateral support
3. Capital – adequate capital to support normal business operations
4. Conditions – what’s affecting the business
5. Character – who are the people behind the business

“In today’s environment, banks emphasize ALL five elements,” White said, “whereas in the past too much reliance may have been placed upon appreciating collateral values under unsustainable market conditions.”

Kevin Halloran, Arizona state president of Mutual of Omaha Bank, said that while there have been shifts in the requirements banks are setting for lending, he sees the industry taking steps toward normalcy.

“I believe lending standards have returned to the original norm,” he said. “In the early to mid-2000s, the banking industry required only limited borrower documentation relating to income and other basic information for residential loans. Now, the industry is requesting proper information to make sound decisions.”

On the business lending side of the equation, “lending standards over the past 10 months have loosened in both pricing and structure for both large and small companies,” Halloran said.

And while some banks have pulled back lending activity, it’s definitely not the case at many Arizona banks.

“Loans at our company have grown 8 percent this year and in discussions with my colleagues at other financial institutions in the Valley, they are experiencing similar results,” said Dave Ralston, chairman and CEO of Bank of Arizona. “Loans are the lifeblood of a bank and at Bank of Arizona. loan growth is our number one priority.  We are seeing increasing demand from credit-worthy consumers and businesses in the Valley.”

Halloran echoed Ralston’s observations.

“Over the past three years, we have completed more than $500 million in new loans in Arizona,” Halloran said. “That includes commercial loans and commercial real estate financing across multiple industries, as well as private banking loans and residential mortgages. Our local commercial banking group has provided local businesses with working capital, revolving lines of credit, equipment loans, owner-occupied loans and merger and acquisition loans. Our commercial real estate group has provided loans in industrial, multi-family, senior and student housing, charter schools and multiple other real estate segments. So we have been – and will continue to be – a very active lender.”

A positive result in the changes in lending banks have been forced to examine in the wake of the Recession is that bank have learned lessons that will create a stronger business model for the industry.

“Banks need to consistently monitor their concentrations in all lending sectors and understand they can only provide so much capital to any one industry,” Halloran said. “Arizona’s population grew so much over the past decade that it resulted in a substantial need for real estate lending. The concentration Arizona banks had in real estate negatively affected all Arizona banks.  In the future, I believe all banks will be better at managing their overall balance sheet risk as a percentage of capital.”

Phoenix Suns Head Coach, John MacLeod Inducted

Suns Induct MacLeod Into Ring Of Honor

Former Phoenix Suns Head Coach, John MacLeod, was inducted into the Suns Ring of Honor, the club’s highest achievement, during halftime of Wednesday’s Suns-Thunder game.

MacLeod coached the Suns from 1973 – 1987, and remains the winningest head coach in franchise history, having tallied 579 victories during his tenure. Only five coaches in NBA history have won more games with a single team.

“The Phoenix Suns are proud to induct John MacLeod into the Suns Ring of Honor,” said Suns Managing Partner Robert Sarver. “Coach MacLeod played an instrumental role in our organization’s legacy of success, so it’s only appropriate to put his name up alongside the other Suns legends.”

The induction ceremony took place at halftime with “The Voice of the Phoenix Suns,” Al McCoy serving as emcee. Ring of Honor members were on hand for the ceremony, which featured comments from Paul Westphal and Alvan Adams, with MacLeod’s family and friends nearby. Throughout the night former colleagues, players and friends also paid tribute to MacLeod with video messages.

As fans entered US Airways Center, they were able to write a personal message to MacLeod, in addition to enjoying photos and memorable moments of the honoree during his tenure with the Suns.

MacLeod led the 1976 Suns to one of the team’s two NBA Finals appearances, and still holds Suns coaching records for NBA Playoffs appearances (9) and playoff victories (37). MacLeod’s 707 career coaching victories place him as one of the NBA’s Top 20 all-time wins leaders.

MacLeod joins twelve other Ring of Honor members (Alvan Adams, Charles Barkley, Tom Chambers, Jerry Colangelo, Walter Davis, Cotton Fitzsimmons, Connie Hawkins, Kevin Johnson, Dan Majerle, Joe Proski, Dick Van Arsdale and Paul Westphal).

Fans interested in leaving comments or well wishes for Coach John MacLeod can do so by logging on to Suns.com/MacLeod.