$3 Billion Real Estate Giant That You May Not Know
Kevork Hovnanian: From Refugee to Real Estate Titan
Hey everyone! We're kicking off the year strong with founder stories shared on the podcasts (Spotify, Apple, RSS) and events (check them out for NYC and Bay Area). This year is shaping up to be our most jam-packed yet.
Thanks for reading and for being part of the journey! As always, I would love to get your feedback in the comments below.
🔊 Lots Going On!
March 13 → Brooklyn (RSVP)
March 19 → Manhattan (RSVP)
April 7 → We’re hosting an exclusive founders dinner for FinTech foreign-born founders for NY FinTech Week (get an invite!)
Listen (we’re on all podcast apps)
Anada Lakra, helping non-native English speakers with Hollywood-style coaching
Pallavi Pande, sustainable tableware from fallen Areca palm leaves
Shaping the Suburbs
Hovnanian Enterprises, Inc. is a household name in the US housing market, founded by Kevork Hovnanian and his three brothers in the 1950s. Today they're the 11th biggest homebuilder in the country, offering mortgages and constructing homes across 12 states and over 50 cities.
The post-WWII housing boom fueled the rise of the suburbs, and Hovnanian Enterprises played a key role in their transformation. As Barry Meier of The New York Times wrote, "Mr. Hovnanian was among the developers who transformed the shape of suburbia in the 1970s and 1980s by building inexpensive town houses and condominiums for young families who were first-time buyers.”
In 2023, Hovnanian Enterprises, Inc. generated $2.83 billion in revenue and its stock currently sits around $150 in early March 2024.
From Refugee to Real Estate Titan
![FAR New York]: Founder and Honorary Chairman of the Fund for Armenian Relief, Kevork Hovnanian Passed Away | FARs Blog](https://substackcdn.com/image/fetch/$s_!EFk_!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F694cd736-6083-43df-a3bf-fdccfb2fee36_204x298.jpeg "FAR New York]: Founder and Honorary Chairman of the Fund for Armenian Relief, Kevork Hovnanian Passed Away | FARs Blog")
Kevork Hovnanian was born in present-day Iraq in 1923 to Christian Armenian refugees. His father, Stepan, ran a successful construction company, but when he fell ill, Kevork, the eldest son, stepped up and took over the business. Kevork grew the company to a massive 12,000 employees. However, things took a turn in 1958 when the Baathist party took over the Iraqi government and nationalized companies, including theirs.
Seeing no future in Iraq, Kevork and his family were forced to flee to the United States. In 1959, Kevork and his brothers (Hirair, Jirair, and Vahak) pooled their money (each contributing $1,000) and secured a $20,000 loan from their in-law, Peter S. Vosbikian (the Armenian immigrant who invented the sponge mop 🧽). they founded Hovnanian Enterprises in a trailer in Toms River, New Jersey.
Initially, they built custom homes around Toms River, but by 1964, they switched strategy to focus on condominiums, which were less common at the time. This shift was driven by Kevork's frustration with the difficulty of estimating costs for custom homes.
The Philosophy of Inexpensive Homes: Making the Dream Accessible
In the 1960s, a typical Hovnanian home for first-time buyers was around 950 square feet and cost between $18,000 and $19,000 (equivalent to $185,000-$196,000 today). These homes sold quickly across New Jersey, solidifying the company's reputation as a reasonable option for first-time home owners. This strategic move to focus on smaller, more affordable starter homes gave them a competitive edge and set them apart in the market.
“We don't put in a lot of recreation facilities because people don't have much time to socialize these days.” - Kevork Hovnanian
While competitors were busy luring buyers with fancy amenities like communal swimming pools, Hovnanian Enterprises took the opposite approach, eliminating them altogether. A typical Hovnanian home built in the early 1980s cost around $30,000, which was half the median price of homes in New Jersey at the time. In a 1983 interview with The New York Times, Kevork Hovnanian explained his philosophy, "We don't put in a lot of recreation facilities because people don't have much time to socialize these days.", reflecting the realities of his working class buyers.
Expansion and Going Public
By the 1970s, the company expanded its reach to new markets like Florida, Texas, Georgia, and Pennsylvania, using the same successful playbook they developed in New Jersey. In 1982, they made several strategic acquisitions to fuel their growth. They bought a mortgage brokerage firm to streamline the process and an engineering company to build the homes that they were known for. They IPO’d in 1983 and despite challenges in the market (such as the Great Financial Crisis), have expanded to 12 states and deliver a portfolio of buildings including high rise buildings, single family homes, and luxury apartments. In 1997, Mr. Hovnanian retired and stepped down as the CEO, handing the reigns to his son, Ara Hovnanian.
Join our in-person events!
March 13 → Brooklyn (RSVP)
March 19 → Manhattan (RSVP)
March 28 → Making In America: Calling All Immigrant Founders & Creators (RSVP)
April 7 → We’re hosting an exclusive founders dinner for FinTech foreign-born founders for NY FinTech Week (get an invite!)
April 24 → Brooklyn (RSVP)
October/November → Hosting a 400+ summit for immigrants in NYC. If you have connections to an awesome venue, please comment below!
 | A guest post by
|
It’s amazing to see Kevork's journey and what he's been able to accomplish!