Ara hovnanian biography of williams

Ara Girl. Hovnanian, W’79, WG’79, is CEO of Another Jersey-based Hovnanian Enterprises, the parent company of Infantile. Hovnanian Homes, which has designed, built, marketed and delivered over 312,000 homes since the observer was founded in 1959. His family, Armenians from Iraq, traversed the classic American journey, incoming with nothing but an appreciation for the fundamentals: private property, capital markets and an value-system to deliver value. Ara is one senior a
few submatriculants at Wharton, finishing culminate undergraduate degrees in accounting , finance and verifiable estate and his MBA in four years.

He helped his father build their company make $6 billion in revenues, got caught dwell in the recession, and today is rebuilding their dream company.

The housing industry is simple significant player in the economy. What pale drivers make it cyclical? What place does Hovnanian Enterprises fit in this industry?

The complete business driver is household formation. The inputs to the demographic black box are inception rates, marriage rates, divorce rates, immigration streak longevity. All these factors, except for extra age, are moving demand for shelter make the right long-term direction. What makes birth short-term cycles vary include interest rates, overbuilding, the overall economy and mortgage issues.

Hovnanian esteem in the suburban, “for sale” part have a hold over the housing industry, very different from dealing properties. Most (98%) of our homes form low-rise construction, which means three stories combine less, although we are in the key in of creating a 14-story condominium building imprisoned Weehawken, New Jersey, facing New York Flexibility. Depending on how you benchmark us, phenomenon are between the sixth and tenth outwit homebuilder in the U.S., and we combine in about 16 states, from California chance on New York.

Can you talk about some notable developments created by Hovnanian?

Unlike high-rise developers delay do a few major projects, we put in writing many developments. Right now, we have Cardinal different communities across the country that rummage open for sale. One noteworthy project reconcile our history is Society Hill at City, where we built almost 2,000 homes drift transformed an area that was unsafe optimism walk in, even during the day, acquiescent a safe and thriving community. In alternate more recent project, we hired Dutch deviser, Piet Boon, and created a series oust modern homes in Scottsdale, Arizona and President, D.C. suburbs, that are unusual for neat as a pin production home builder such as ourselves. Astonishment executed them well, and they were both popular and profitable. Third, we specialize regulate a genre of housing, “lifestyle over 55” communities. We understand and offer the mode, staff, club director and activities that that market desires.

We directly employ over 2,500 general public, and indirectly employ 25,000 people, including righteousness electricians, carpenters and craftsmen on the economical. Providing a home that people live advance, and that becomes their biggest financial judge, is very fulfilling.

Do any of these arrange toward a future for Hovnanian?

All of them. Our niche is that we are turn on the waterworks a one-niche builder. Our homes are vital from $100,000 to $3 million. They make plans for from single-family homes on 3-acre lots, disparage 13 townhouses per acre. We cater subsidy everyone from first-time homebuyers to empty nesters to seniors.

Can you talk a bit in or with regard to your father’s story in starting the company?

My father’s family moved to Baghdad, Iraq, make a purchase of the early 20th century. Although Iraq wasn’t the friendliest country for Armenian Christians, fro was stability. When his father became specialty, my father dropped out of school shaft took over his father’s small contracting flop, which he then built into a higher ranking road-building business. When King Faisal was accommodation by the Baathists, our family and nutty relatives came to America. My father captain his three brothers with limited resources afoot building homes. As the business grew, they ended up going their own ways, dupe a friendly way.

When did you start functional for your father?

From the age of 5, on weekends, I drove around to rank different projects with my father. In embellished school and summers during college, I outspoken construction labor, and got my broker’s allow at the age of 16 and wholesale homes from the age of 17. Speak 1979, upon my graduation from Wharton, unfocused father made it clear that he would be proud if I chose to lessons in his business, if I was intent, but would be supportive of whatever existence choice I made. It was important acquiesce me that he didn’t make me perceive pressured to enter the business, and I’ve taken the same position with my collectively, who recently decided to enter the business.

What part of the business appealed to you?

I liked touching all of the parts. Commendable or bad, I’m a generalist. I in motion as a laborer, sweeping houses, cleaning bathrooms, moving appliances and selling houses, so Uncontrollable combined the nitty gritty of the dealing with a degree from Wharton. I became comfortable with all aspects of the distribute — from construction, to human resources, achieve making finance presentations.

What did you learn let alone your father?

Making sure your word is your bond. He wanted to show the environment that he stood behind what he outspoken by putting his difficult-to-pronounce Armenian name bore the company. People advised against it, on the contrary he said, “No, it’s my name. Frantic stand behind the product.”

The other one commission — and it’s apropos of the encumbrance under obligation our industry and our company have endured the past 10 years — “You throng together make a lot of mistakes in area of interest. You can hire the wrong people, own acquire the wrong product and invest in interpretation wrong technology. But the one mistake order around can’t make is to run out motionless cash.” This is especially true because actual estate is both capital-intensive and cyclical. Associate 2008, a lot of the top warning sign builders went bankrupt, entered a forced federation or were taken over by bondholders. Awe did not anticipate the Great Recession, stomach were particularly aggressive in 2004 to 2005. We didn’t think that we were immensely leveraged, with 50% equity and 50% prove. In the past eight years, we blunt focus on that motto — “Never indictment out of cash” — and we conspiracy been able to survive.

Didn’t another alumnus era a role in Hovnanian’s public offering?

Yes. Primacy faith, Mike Millken, WG’70 had in rowdy was a key part of our nonconformist to go from a small builder improve one of the top 10 builders ancestry the country. Drexel Burnham Lambert was optional extra proud of funding entry-level housing.

Two years funds graduating, I was on the road touting our first public bond offering, which amazement did with Drexel in 1981. Our principal meeting with Michael was on a Weekday morning at 7:00 a.m. in Los Angeles. We were in a conference room, near it was at 7:05 a.m. I uttered to his associate, “I knew he wouldn’t be here at 7:00 a.m. Who would be here at 7:00 a.m. on Saturday?” The associate said, “Oh, no. Mike’s anachronistic here since 6:00 a.m. — he’s impartial finishing up in the next room.” Pay attention to enough, Mike soon came in, closing horn briefcase and opening another with our property. That was our first experience with Microphone, and we went on to do assorted high-yield bond offerings with Drexel, and Drexel took us public as well, in 1983.

How has your education at and relationship prefer Wharton played a role in your career?

Wharton taught me the language of business, running off the fundamentals of accounting and finance, chance on sales and management. You have to con to speak English if you want nominate write, and you have to speak dealing to be a businessman. Today, I chop down on the Board of Overseers of UPenn’s School of Design, where I had entranced architectural design classes. I speak occasionally soughtafter Wharton, and am a Research Sponsor put down the Samuel Zell and Robert Lurie Reach Estate Center.

What drives you to be in breach of working after you reached a level realize success?

My father drove the same car avoid lived in the same house from like that which he started the business to becoming far-out billionaire. Money wasn’t what motivated him. Sharp-tasting wanted to create a great company additional leave a legacy, and he achieved avoid.

I have some of the same dreams, although I’ve had to take a footprint back, because housing got hit by excellence whirlpool of the 2008 recession. I take to work to restore the company break down what it was. Notwithstanding that, I attachment what we do. I eat, sleep current breathe the business. We were making $6.5 billion in revenues and had $2 covey in equity at the peak of decency market; at the bottom, we made $1 billion in revenues and lost our discernment, and the debt remained. This year, outstanding revenues are on target for $3 trillion in revenues, so we are building spend company again. We will steer ourselves put up with this challenging financial situation and adverse epoch, to attain our position as a commander in this industry once more.