In 1979, we formed HATSAT Properties to develop Buildings #19 and #20. Sales were going very well on Buildings #26 and #27, and in fact, the two buildings had sold out and were under construction and being delivered. We had a waiting list of over 200+ people who were going to transfer their deposits to the new buildings. We proceeded to plan and design the build and commenced construction of Building #20 first, but at the same time, poured the foundation on Building #19 as we would save a lot of money by doing so. In 1980, the prime rate skyrocketed to a record high of 21% and we lost all but a few contracts, who were cash buyers. We had a construction loan with The Atlantic National Bank, which later became First Union Bank.
We made the decision to pay back the bank and not default. We calculated all the remaining costs and the payoff to the bank and “repriced” the building to recover those costs and take our loss. To sell the building, we gathered a list of doctors, dentists, accountants, and investors whom we could approach for a cash investment in buying the apartments to rent out. This situation would eventually change and there would be a big upside to them in selling the units.
We contacted the potential buyers and were oversubscribed and were able to raise a few of the apartments’ pricing. We called Billy Walker, the Chairman of the bank and he flew down to our office to get the check, mentioning that he would never forget this effort to preserve our good name and make the bank whole. This is an example of how we do business and a testament to how our reputation is of the utmost importance. Although we faced a failure due to circumstances beyond our control, we successfully sold out the building and lived to be welcomed in banks in the future.