Washington Square

The project was almost fully drawn on a $153 Million syndicated construction loan with US Bank, Bank of America, Chase Bank and Key Bank. When the news of the crisis hit, buyers on over 150 of its 300 plus sold units immediately sent contract termination notices demanding a return of their earnest money. Also at this time, construction slowed and completion timelines were missed. Due to circumstances out of its control, the project was completely derailed in a matter of weeks.

Having never surrendered a project to a lender due to a strong internal mantra at Wasatch Group, many would question if the current circumstances somehow warranted it. Mr. Nielson and Dell Loy Hansen (CEO of Wasatch Group) knew this was not an option. Instead, Mr. Hansen posted nearly $40 Million of his own personal funds to payoff three of the four syndicated banks who demanded immediate repayment under the loan terms. Messrs. Hansen and Nielson entered into a new loan agreement with US Bank, which carried with it stringent quarterly curtailment payments if sales quotas were missed and a drop-dead date for completion of construction.

Mr. Nielson then reorganized the construction team, negotiated change orders and completion schedules with the general contractor and completed construction by the deadline. Mr. Nielson also terminated the third-party sales team and immediately organized a new internal sales team lead by himself.

Agreements with third party furniture warehouses were put in place by Mr. Nielson and small empty condominiums were transformed into 14 beautifully appointed sales models. Mr. Nielson allocated over 100 of the unsold units to a “lease to own” program which was leased up to 99% occupancy within months providing interim relief from carrying cost of over 250 unsold and cancelled units.