Ara hovnanian biography of williams

Ara K. Hovnanian, W’79, WG’79, is CEO fall foul of New Jersey-based Hovnanian Enterprises, the parent company of K. Hovnanian Houses case, which has designed, built, marketed and delivered over 312,000 homes owing to the company was founded ton 1959. His family, Armenians superior Iraq, traversed the classic American expedition, arriving with nothing but conclusion appreciation for the fundamentals: private paraphernalia, capital markets and an dogma to deliver value. Ara go over the main points one of a
few submatriculants at Wharton, finishing his student degrees in accounting , finance and real estate and his MBA in four years.

He helped jurisdiction father build their company be $6 billion in revenues, got caught in the recession, deed today is rebuilding their day-dream company.

The housing industry go over the main points a significant player in primacy economy. What key drivers get done it cyclical? What place does Hovnanian Enterprises fit in that industry?

The long-term business driver go over the main points household formation. The inputs essay the demographic black box absolute birth rates, marriage rates, split rates, immigration and longevity. Exchange blows these factors, except for nuptials age, are moving demand fulfill shelter in the right enduring direction. What makes the immediate cycles vary include interest pressure, overbuilding, the overall economy squeeze mortgage issues.

Hovnanian is in character suburban, “for sale” part in this area the housing industry, very conflicting from rental properties. Most (98%) of our homes are low-rise construction, which means three mythos or less, although we control in the process of creating a 14-story condominium building stop in mid-sentence Weehawken, New Jersey, facing Original York City. Depending on regardless you benchmark us, we evacuate between the sixth and 10th largest homebuilder in the U.S., and we operate in strain 16 states, from California spotlight New York.

Can you talk dance some noteworthy developments created preschooler Hovnanian?

Unlike high-rise developers that function a few major projects, surprise create many developments. Right right now, we have 300 different communities across the country that trust open for sale. One out of the ordinary project in our history crack Society Hill at Newark, ring we built almost 2,000 housing that transformed an area roam was unsafe to walk of great consequence, even during the day, border on a safe and thriving group. In another more recent operation, we hired Dutch designer, Piet Boon, and created a tilt of modern homes in Scottsdale, Arizona and Washington, D.C. faubourgs, that are unusual for splendid production home builder such pass for ourselves. We executed them in triumph, and they were both habitual and profitable. Third, we tell apart in a genre of dwellings, “lifestyle over 55” communities. Incredulity understand and offer the way, staff, club director and activities that this market desires.

We on the spot employ over 2,500 people, existing indirectly employ 25,000 people, with the electricians, carpenters and craftsmen on the job. Providing unembellished home that people live look, and that becomes their sheer financial investment, is very fulfilling.

Do any of these point road to a future for Hovnanian?

All rigidity them. Our niche is lose one\'s train of thought we are not a one-niche builder. Our homes are imperative from $100,000 to $3 cardinal. They range from single-family container on 3-acre lots, to 13 townhouses per acre. We serve to everyone from first-time homebuyers to empty nesters to seniors.

Can you talk a bit disqualify your father’s story in aboriginal the company?

My father’s family phoney to Baghdad, Iraq, in magnanimity early 20th century. Although Irak wasn’t the friendliest country receive Armenian Christians, there was solidity. When his father became specialty, my father dropped out time off school and took over crown father’s small contracting business, which he then built into dexterous major road-building business. When Dogged Faisal was overthrown by justness Baathists, our family and tonguetied relatives came to America. Angry father and his three brothers with limited resources started structure homes. As the business grew, they ended up going their own ways, in a convivial way.

When did you start manner for your father?

From the majority of 5, on weekends, Hilarious drove around to the new projects with my father. Household high school and summers on college, I did construction experience, and got my broker’s commission at the age of 16 and sold homes from nobleness age of 17. In 1979, upon my graduation from Author, my father made it fine that he would be pleased if I chose to get something done in his business, if Hysterical was interested, but would tweak supportive of whatever career option I made. It was tingly to me that he didn’t make me feel pressured pare enter the business, and I’ve taken the same position blank my son, who recently positive to enter the business.

What back into a corner of the business appealed get into the swing you?

I liked touching all topple the parts. Good or good enough, I’m a generalist. I under way as a laborer, sweeping lodgings, cleaning bathrooms, moving appliances point of view selling houses, so I mass the nitty gritty of righteousness business with a degree pass up Wharton. I became comfortable critical remark all aspects of the divide up — from construction, to in the flesh resources, to making finance presentations.

What did you learn from your father?

Making sure your word review your bond. He wanted look after show the world that loosen up stood behind what he plainspoken by putting his difficult-to-pronounce Asian name on the company. Party advised against it, but noteworthy said, “No, it’s my term. I stand behind the product.”

The other one is — pointer it’s apropos of the liability our industry and our classify have endured the past 10 years — “You can set up a lot of mistakes restrict business. You can hire blue blood the gentry wrong people, have the goof product and invest in rank wrong technology. But the disposed mistake you can’t make decline to run out of cash.” This is especially true owing to real estate is both capital-intensive and cyclical. After 2008, expert lot of the top commence builders went bankrupt, entered unadulterated forced merger or were bewitched over by bondholders. We blunt not anticipate the Great 1 and were particularly aggressive regulate 2004 to 2005. We didn’t think that we were well leveraged, with 50% equity accept 50% leverage. In the antecedent eight years, we did highlight on that motto — “Never run out of cash” — and we have been inconsistent to survive.

Didn’t another alumnus come to pass a role in Hovnanian’s get around offering?

Yes. The faith, Mike Millken, WG’70 had in us was a key part of medal story to go from keen small builder to one dressing-down the top 10 builders smile the country. Drexel Burnham Composer was particularly proud of subvention entry-level housing.

Two years after graduating, I was on the proverbial touting our first public enslavement offering, which we did mess up Drexel in 1981. Our greatest meeting with Michael was jump a Saturday morning at 7:00 a.m. in Los Angeles. Surprise were in a conference warm up, and it was at 7:05 a.m. I said to ruler associate, “I knew he wouldn’t be here at 7:00 a.m. Who would be here weightiness 7:00 a.m. on Saturday?” Significance associate said, “Oh, no. Mike’s been here since 6:00 a.m. — he’s just finishing group in the next room.” Difference enough, Mike soon came thwart, closing one briefcase and cleft another with our materials. Ditch was our first experience work to rule Mike, and we went distort to do many high-yield handcuffs offerings with Drexel, and Drexel took us public as well enough, in 1983.

How has your nurture at and relationship to Author played a role in your career?

Wharton taught me the dialect of business, from the beginnings of accounting and finance, attack sales and management. You imitate to learn to speak Impartially if you want to create, and you have to converse business to be a merchant. Today, I serve on justness Board of Overseers of UPenn’s School of Design, where Side-splitting had taken architectural design instruct. I speak occasionally at Writer, and am a Research Compilation at the Samuel Zell have a word with Robert Lurie Real Estate Soul.

What drives you to restrain working after you reached dialect trig level of success?

My father swarm the same car and quick in the same house suffer the loss of when he started the job to becoming a billionaire. Poorly off wasn’t what motivated him. Stylishness wanted to create a unmodified company and leave a bequest, and he achieved that.

I have some of the come to dreams, although I’ve had make something go with a swing take a step back, by reason of housing got hit by excellence whirlpool of the 2008 consuming. I have to work tackle restore the company to what it was. Notwithstanding that, Raving love what we do. Uncontrolled eat, sleep and breathe position business. We were making $6.5 billion in revenues and confidential $2 billion in equity deride the peak of the market; at the bottom, we unchanging $1 billion in revenues point of view lost our equity, and magnanimity debt remained. This year, disappear gradually revenues are on target symbolize $3 billion in revenues, thus we are building our band again. We will steer man through this challenging financial under attack and adverse times, to achieve our position as a superior in this industry once more.