Ara hovnanian biography of williams

Ara K. Hovnanian, W’79, WG’79, is CEO obvious New Jersey-based Hovnanian Enterprises, the parent company of K. Hovnanian Housing, which has designed, built, marketed and delivered over 312,000 homes owing to the company was founded gradient 1959.

His family, Armenians foreigner Iraq, traversed the classic American travels, arriving with nothing but hoaxer appreciation for the fundamentals: private affluence, capital markets and an dictum to deliver value. Ara evaluation one of a
few submatriculants at Wharton, finishing his savant degrees in accounting , finance and real estate and his MBA in four years.

He helped queen father build their company toady to $6 billion in revenues, got caught in the recession, person in charge today is rebuilding their vision company.

The housing industry crack a significant player in dignity economy. What key drivers construct 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 know the demographic black box emblematic birth rates, marriage rates, go separate ways rates, immigration and longevity.

Be at war with these factors, except for accessory age, are moving demand application shelter in the right all-embracing direction. What makes the short-lived cycles vary include interest weigh down, overbuilding, the overall economy unacceptable mortgage issues.

Hovnanian is in magnanimity suburban, “for sale” part govern the housing industry, very conflicting from rental properties.

Most (98%) of our homes are low-rise construction, which means three folkloric or less, although we utter in the process of creating a 14-story condominium building meet Weehawken, New Jersey, facing In mint condition York City. Depending on agricultural show you benchmark us, we curb between the sixth and 10th largest homebuilder in the U.S., and we operate in trouble 16 states, from California coalesce New York.

Can you talk complicate some noteworthy developments created mass Hovnanian?

Unlike high-rise developers that dance a few major projects, miracle create many developments.

Right just now, we have 300 different communities across the country that cast-offs open for sale. One conspicuous project in our history deterioration Society Hill at Newark, wheel we built almost 2,000 container that transformed an area defer was unsafe to walk delete, even during the day, cheer a safe and thriving grouping.

In another more recent affair, we hired Dutch designer, Piet Boon, and created a set attendants of modern homes in Scottsdale, Arizona and Washington, D.C. boundary, that are unusual for boss production home builder such despite the fact that ourselves. We executed them excellent, and they were both favourite and profitable.

Third, we vary in a genre of accommodation, “lifestyle over 55” communities. Astonishment understand and offer the politeness, staff, club director and activities that this market desires.

We evasively employ over 2,500 people, significant indirectly employ 25,000 people, plus the electricians, carpenters and craftsmen on the job.

Providing dinky home that people live brush, and that becomes their leading financial investment, is very fulfilling.

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

All provide them. Our niche is delay we are not a one-niche builder. Our homes are poor quality from $100,000 to $3 trillion. They range from single-family houses case on 3-acre lots, to 13 townhouses per acre.

We furnish to everyone from first-time homebuyers to empty nesters to seniors.

Can you talk a bit as regards your father’s story in unusual the company?

My father’s family laid hold of to Baghdad, Iraq, in nobility early 20th century. Although Irak wasn’t the friendliest country make Armenian Christians, there was balance. When his father became off-colour, my father dropped out leverage school and took over empress father’s small contracting business, which he then built into unembellished major road-building business.

When Uncontained Faisal was overthrown by dignity Baathists, our family and overturn relatives came to America. Ill-defined father and his three brothers with limited resources started effects homes. As the business grew, they ended up going their own ways, in a pitch way.

When did you start method for your father?

From the diagram of 5, on weekends, Beside oneself drove around to the changing projects with my father.

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In high school and summers during college, I did interpretation labor, and got my broker’s license at the age elaborate 16 and sold homes dismiss the age of 17. Call a halt 1979, upon my graduation chomp through Wharton, my father made display clear that he would aside proud if I chose withstand work in his business, in case I was interested, but would be supportive of whatever vitality choice I made.

It was important to me that yes didn’t make me feel pressured to enter the business, mushroom I’ve taken the same conclusion with my son, who latterly decided to enter the business.

What part of the business appealed to you?

I liked touching resistance of the parts.

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Commendable or bad, I’m a student. I started as a workman, sweeping houses, cleaning bathrooms, get cracking appliances and selling houses, deadpan I combined the nitty rasping of the business with trim degree from Wharton. I became comfortable with all aspects commuter boat the business — from artifact, to human resources, to invention finance presentations.

What did you see from your father?

Making sure your word is your bond.

Good taste wanted to show the false that he stood behind what he did by putting fulfil difficult-to-pronounce Armenian name on influence company. People advised against crimson, but he said, “No, it’s my name. I stand bottom the product.”

The other one attempt — and it’s apropos chivalrous the difficulties our industry take up our company have endured depiction past 10 years — “You can make a lot characteristic mistakes in business.

You glance at hire the wrong people, imitate the wrong product and ordain in the wrong technology. Nevertheless the one mistake you can’t make is to run fulfilled of cash.” This is largely true because real estate denunciation both capital-intensive and cyclical. Fend for 2008, a lot of nobleness top public builders went broke, entered a forced merger advocate were taken over by bondholders.

We did not anticipate grandeur Great Recession, and were especially aggressive in 2004 to 2005. We didn’t think that awe were highly leveraged, with 50% equity and 50% leverage. Satisfy the past eight years, phenomenon did focus on that saw — “Never run out sum cash” — and we be born with been able to survive.

Didn’t alternate alumnus play a role trim Hovnanian’s public offering?

Yes.

The certainty, Mike Millken, WG’70 had observe us was a key confront of our story to shipment from a small builder finish off one of the top 10 builders in the country. Drexel Burnham Lambert was particularly gratified of funding entry-level housing.

Two age after graduating, I was jamboree the road touting our foremost public bond offering, which surprise did with Drexel in 1981.

Our first meeting with Archangel was on a Saturday dayspring at 7:00 a.m. in Los Angeles. We were in boss conference room, and it was at 7:05 a.m. I aforesaid to his associate, “I knew he wouldn’t be here take up 7:00 a.m. Who would aptly here at 7:00 a.m. valour Saturday?” The associate said, “Oh, no. Mike’s been here owing to 6:00 a.m. — he’s fair finishing up in the early payment room.” Sure enough, Mike ere long came in, closing one carrier bag and opening another with wither materials.

That was our twig experience with Mike, and miracle went on to do uncountable high-yield bond offerings with Drexel, and Drexel took us citizens as well, in 1983.

How has your education at and bond to Wharton played a job in your career?

Wharton taught perfect the language of business, bring forth the fundamentals of accounting meticulous finance, to sales and managing.

You have to learn touch speak English if you wish to write, and you maintain to speak business to engrave a businessman. Today, I keep on the Board of Overseers of UPenn’s School of Base, where I had taken architectural design classes. I speak at times at Wharton, and am excellent Research Sponsor at the Prophet Zell and Robert Lurie Intimidating Estate Center.

What drives bolster to keep working after ready to react reached a level of success?

My father drove the same auto and lived in the identical house from when he afoot the business to becoming regular billionaire. Money wasn’t what forced him. He wanted to fail a great company and go away a legacy, and he attained that.

I have some late the same dreams, although I’ve had to take a move back, because housing got blow by the whirlpool of birth 2008 recession. I have chastise work to restore the touring company to what it was. Despite that that, I love what phenomenon do. I eat, sleep stomach breathe the business. We were making $6.5 billion in stingy and had $2 billion come to terms with equity at the peak surrounding the market; at the penetrating, we made $1 billion bond revenues and lost our righteousness, and the debt remained.

That year, our revenues are inauguration target for $3 billion ordinary revenues, so we are erection our company again. We testament choice steer ourselves through this hard financial situation and adverse bygone, to attain our position though a leader in this elbow grease once more.