Michael Hatcher makes up one half of a real estate power couple in Atlanta.
Hatcher and his wife, Karen, who is president of the Atlanta Realtors Association, cover two sides of the housing business: Karen specializes in buying and selling, and Michael, president and CEO of Sovereign Construction and Development, concentrates on building.
Having led his own company for 15 years, Hatcher has seen the highs and lows of the homebuilding industry. With a focus on affordable housing, he has faced business challenges that many builders don’t have to consider.
What led you to your career? I moved to Atlanta in the early 1990s and attended Morehouse College. After graduating, I used my entrepreneurial skills to start and run several different small businesses, but ultimately I found my passion as a developer and builder, which led me to the construction industry. I loved everything about construction. To this day, I absolutely love being on a construction site. I spend a majority of my time in the office but when I get out onsite, there are times I get so engrossed in everything going on I completely lose track of time. Some people binge watch shows on Netflix; I could literally binge watch the construction activity on one of our project sites all day long. Sovereign Construction and Development was founded in 2007. Our core operations are general contracting, construction management and development. We pursue and manage projects throughout the southeast, but Georgia, specifically the Atlanta metro area, is where most of our business activity is focused.
Who was your biggest influence in your career? Without question my mom and dad. My mother was a teacher for 35 years and she taught me about the need for discipline and the power of consistency. My father was an avid reader and he taught me how to learn. When I was a child we would go to the library on weekends and spend hours reading. Those trips to the library taught me you could learn and do anything as long as you had access to the information. My parents gave me the gifts of discipline, consistency and curiosity, and those are probably my greatest strengths.
What is the biggest challenge in your career or job? The biggest challenge I run into is getting people to understand that construction is a collaborative process based on relationships and not a zero-sum transaction based on winning, losing and the cheapest price. Good project outcomes are based on all project stakeholders having a great construction experience and completing the project with a sense of pride, equity and satisfaction. Collaboration is the way and communication is the key. If construction is done right, we all win. We approach every project with a spirit of partnership and we pride ourselves on creating a holistic construction ecosystem.
What’s the most rewarding part of your job? The most rewarding part of my job is the positive impact we make on people’s lived experiences. All great things are built. As builders, we can fundamentally change and elevate the quality of peoples’ lives in everything we do and in everything we build. As an organization, our mission is to make people’s lives better by building better places. The built environment is the backdrop for all of life’s greatest events and milestones, no matter who you are or where you are.
What’s the hardest business lesson you’ve learned? The hardest lesson I have learned in business is taking one day at a time. As a CEO, you are always planning and strategizing, driving toward a result or a goal. That is great, but you really have to spend just as much time being present in the moment, mindful, focused and grateful for all the daily small steps needed to accomplish the big-picture vision.
How are residential developers and homebuilders in the affordable and entry-level markets affected by rising interest rates and elevated construction costs? Rising interest rates and elevated construction costs affect all builders, not just those that focus on the affordable housing sector. The primary difference between the affordable builder and the market-rate home builder is the manner by which they can offset the impacts of increased cost on the project. The market-rate builder can raise home prices, which provides an opportunity for the increased cost to be absorbed by the sale, but the affordable builder does not have that luxury. The price of an affordable project cannot exceed a determined price threshold. If it does, it is no longer affordable. Rising interest rates and elevated construction costs are definitely a threat to the affordable home builder because they do not have the same ability to increase sale price as a means of mitigating increased cost.
Many buyers are priced out by record home prices and mortgage rates that are at their highest level in a decade. How does this impact the demand for affordable and entry-level homes? It definitely increases the demand for affordable housing, but even if the current market conditions didn’t exist, there would still be a tremendous need and demand for affordable housing. Everyone needs a starting point and without a baseline level of affordable housing stock, it prohibits an individual’s ability to start a family, start planting roots in a neighborhood or community, start building equity and wealth, start realizing the American dream of homeownership. That has long term implications for the growth trajectory of Atlanta.
Read More: Meet Michael Hatcher, Sovereign Construction and Development CEO