Western Alliance in Phoenix discloses issue with CRE loan

Western Alliance Bancorp. in Phoenix disclosed a new issue with a $99 million commercial real estate loan.

The $98.9 billion-asset Western Alliance disclosed in its quarterly filing that a borrower told the bank in late April that it would not repay the CRE non‑owner‑occupied loan. The loan had been performing in accordance with its contractual terms and was internally graded as pass.

The loan was downgraded to substandard and placed on nonaccrual status. The company ordered an appraisal and will conduct a valuation analysis to determine any financial impact.

The collateral is a six-story, newly constructed life-science lab/office building with a seven-story parking structure, located on a 6-acre site in a gateway life-science market.

Western Alliance also received a letter of intent in May from a third party to buy a property that serves as the collateral for an unrelated loan that had been classified as substandard and nonaccrual. The offer is roughly equal to the loan’s $60 million carrying value.