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Q:
Valley Business People Sound Off
Executives answer It appears to many that the Valley economy is picking up speed. What signs do you see that indicate a positive change for the business, field or industry you are in?
Candace D. Wiest
Howard Lein
In 2003, Candace Wiest became the first woman elected a Class A Director of the Federal Reserve Bank of San Francisco, and has since served on the FRBSF Audit Committee and the Fed’s Bank Performance Committee, and was chair of the Public Information Committee.
Howard Lein’s multiple industry recognitions include RE/MAX International’s Broker/Owner of the Year, Multi Office Award. Lein has also owned a successful computer marketing company, development company and insurance brokerage. He is an active civic leader in the Phoenix and Scottsdale communities.
West Valley National Bank www.wvnb.net
RE/MAX Excalibur, Scottsdale www.excaliburrealestate.com
President & CEO West Valley National Bank Sector: Banking One of the key indicators for us is the number of people applying for loans. We are definitely seeing an uptick in loan demand. Year to date, we have grown about 18 percent. I’m not sure if I can attribute the increase to a change in the local economy as much as the increased funding and favorable terms granted by the SBA. A number of our clients in the medical field are taking advantage of the bargains in commercial real estate and record low SBA rates to reduce occupancy expense. Also, while there have been a number of casualties, we are seeing some of the small businesses in the Valley actually stabilize. The banking industry continues to be challenging. The recently passed Financial Reform Act did little to address the problem of the “shadow” banking system that caused the meltdown, but has increased the cost of compliance significantly for the regulated banks. Many of the banks in the Valley need capital to begin lending again. Until the real estate market improves to free up balance sheets, the number of banks like ours that are lending will be limited.
John Cosgrove
Owner RE/MAX Excalibur, Scottsdale Sector: Real Estate The Valley economy has been under siege now for almost three years, prompted by the biggest real estate crash in values since the Great Depression. Unfortunately, the Valley economy is far more dependent on “construction and growth” than most other major metropolitan areas. The glut of foreclosed and short sale properties will continue to stall job growth until cleared out, unless we develop new industry fast. The good news: It is an urban myth that there is a “shadow inventory” of properties artificially held back from sale by lenders. Lenders have feverishly been working to staff up and gain agreements from their participating investors that will allow them to close out accounts and get the properties that are due to be sold moved through the system. We should see the results of that work through 2011 and 2012, with foreclosed inventories dropping back to a more normal level in 2013. Meanwhile, sellers are going to continue to struggle with pricing that competes with the distressed properties. Buyers are greeted with current interest rates of 4 percent. They are seeing an incredible bonanza that will cause the reticent to look back, saying, “I wish I would have …” along with all of the other discussions of opportunities lost.
Principal/Owner Renaissance Executive Forums Sector: Business Within our top executive membership (more than 80), there is a wide range of industry types. The vast majority of members are seeing signs of increased activity and interest in doing business. Not that many months ago, there was little activity for them. Others are continuing to grow. Their focus is on increasing their customers’ revenues and/or productivity. For example: IT projects to improve infrastructure and productivity, improving educational tools to improve student performance while reducing costs, a new real estate agent sales model, timely and accurate transaction billing services,
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ergonomic furnishings that increase productivity, and more efficient time and compliance tracking. All these initiatives give witness to a successful business awakening in the Valley. In 2010, members worked on their business plans to prepare for recovery so that they can gain market share. Now they are working on their business plans for 2011 with the objective of growing their revenues and leveraging the preparation they’ve done in 2010. Perhaps as important, we see improving mental attitudes. Executives are actively looking for growth opportunities versus simply cutting costs. John Cosgrove’s leadership and management experience includes president of his own 200-employee business and senior vice-president of strategy, marketing and product management of a 3,500-employee national technology integration company. He has also provided expert testimony before committees of the U.S. Congress, F.C.C., I.T.C., commissions and courts. Renaissance Executive Forums www.ExecutiveForums.com
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