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Hovnanian Enterprises, Inc. is an American real estate company which is involved in every aspect of marketing homes, including design, construction and sales. The company works with individual detached housing as well as higher-occupancy dwellings, including townhouses, condominiums and retirement homes.
 | |
| Company type | Public |
|---|---|
| NYSE: HOV (Class A) Russell 2000 Component | |
| Industry | Construction |
| Founded | 1959; 61 years ago, 1967; 53 years ago |
| Headquarters | Matawan, New Jersey, United States |
Key people | Kevork Hovnanian (Founder) Ara K. Hovnanian (Chairman President & CEO) Lou Smith (COO) J. Larry Sorsby (CFO & Executive VP) |
| Products | Homes Financial Services |
| Revenue |  US$ 1.991 billion (2018)[1] |
| US$ 8.15 million (2018)[1] | |
| US$ 4.52 million (2018)[1] | |
| Total assets | US$ 1.662 billion (2018)[1] |
| Total equity | US$ -453.50 million (2018)[1] |
Number of employees | 1,851 (October 2018)[1] |
| Website | www |
Company operations
editHovnanian Enterprises, Inc. has delivered in excess of 336,000 houses since incorporation including 5,831 homes in fiscal 2018, with base prices ranging from $144,000 to $2,252,000 and averaging about $393,000. It operates in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia.[2] Members of the Hovnanian family, including Ara K. Hovnanian, have voting control more than 50% of the votes as of January 29, 2018 equivalent to a stake worth $178 million in 2015.[3]
The company relocated its corporate headquarters to a new building on the banks of the Navesink River in Red Bank, New Jersey, in 2006.[4]
In 2018 the corporate headquarters was relocated to Matawan, New Jersey.[5] Also in 2018, Hovnanian moved to default on debts in a manufactured default deal with the Blackstone Group which would benefit through credit default swaps, in exchange for a sweetheart loan from Blackstone.[6] In late May 2018, Blackstone abandoned the effort due to an admonishment from U.S. regulators.[7][8]
History
editIn 1959, Kevork Hovnanian, an ethnic Armenian originally from Iraq, and his three brothers, Hirair Hovnanian, Jirair Hovnanian and Vahak Hovnanian, each contributed $1,000, in addition to $20,000 which they borrowed, to found Hovnanian Enterprises, Inc. in a trailer in Toms River, New Jersey.[9]
Hovnanian and his company earned a reputation to selling low cost condos and townhouses, many to first time young homeowners and families.[9] A typical two-bedroom, two bathroom Hovnanian home built in the early 1980s cost approximately $30,000 because Hovnanian eliminated amenities such as communal swimming pools, which other builders used to attract potential buyers.[9] In a New York Times interview in 1983, Hovnanian explained his reasoning for marketing low cost homes in developments without community amenities, "There are limited recreation facilities going in because people have little time for socialization."[9]
In 1964 Jirair Hovnanian split off from his brothers' company and founded his own construction business, J.S. Hovnanian & Sons, of Mount Laurel Township, New Jersey.[10] Hirair and Vahak also left the company by 1969 to found their own enterprises.[9]
Hovnanian Enterprises had built and sold more than 30,000 homes and condos by 1989.[9] An additional 200,000 residences were sold between 1989 and 2009, as the company expanded its construction to include luxury homes, mid-priced homes and retirement communities.[9] It remains one of the United States' largest builders of "active adult homes", which are sold under the name of Four Seasons communities.[4]
Kevork Hovnanian stepped down as president of Hovnanian Enterprises in 1989, and was succeeded by his son, Ara K. Hovnanian.[9] He remained chief executive until his retirement in 1997, and was also replaced as CEO by Ara Hovnanian.[9] However, he remained the chairman of the company's board of directors until his death in 2009.[9]
Quality
editHovnanian has been the subject of customer complaints. In a few cases, there have been legitimate construction problems in some Hovnanian houses. For example, in 2005, Hovnanian acknowledged problems in a development in New Jersey after nearly three dozen disgruntled homeowners turned to elected officials when their complaints were ignored.[11]
K. Hovnanian the home builder and the mortgage company are no strangers to controversy. In 2008, the home builder was involved in a class action lawsuit where the plaintiffs alleged their subdivision was built near an old bombing range. The company settled the lawsuit in 2011 for a reported $1.2 million.[12]
The mortgage company was involved in a class action lawsuit filed in 2007 alleging violations of the Real Estate Settlement Procedures Act (RESPA) for removing incentives from home buyers if they opted to use another title insurance provider rather than the Hovnanian-affiliated title insurance company.[12]
Charity
edit- K. Hovnanian Children's Hospital was named after builder Kevork Hovnanian after his foundation contributed the "largest donation the hospital had seen in its 101 year history."[13][14]
- Ocean Medical Center expanded in 2013 when it began an $82 million expansion project to substantially increase the capacity of its emergency room facilities and add additional basement and third floor space, funded in part by the family of Kevork Hovnanian who donated $5 million to the cause.[15][16]
References
edit- ^ a b c d e f "Hovnanian Enterprises Inc 2018 Annual Report - Form 10-K - October 31, 2018". secdatabase.com. Retrieved 2018-10-31.
- ^ "Hovnanian Enterprises Inc 2018 Annual Report - Form 10-K - October 31, 2018". secdatabase.com. Retrieved 2018-10-31.
- ^ "Hovnanian Enterprises Inc 2018 Annual Report - Proxy - 2018-01-22". secdatabase.com. Retrieved 2018-01-22.
- ^ a b Willis, David P. (2009-09-24). "Homebuilder leaves legacy of philanthropy". Asbury Park Press. Archived from the original on 2013-01-17.
- ^ Pizzutillo, Rich (2017-09-07). "Homebuilder Hovnanian is moving from Red Bank to Matawan". ROI-NJ. Retrieved 2021-03-24.
- ^ Carruzzo, Fabien; Zide, Stephen D.; King, Daniel (April 10, 2018). Unconventional CDS Credit Events: Hovnanian Enterprises. Kramer Levin Naftalis & Frankel (Technical report). Retrieved 4 March 2021.
- ^ Scurria, Andrew (30 May 2018). "Blackstone Stands Down on Hovnanian Swaps Wager". Wall Street Journal. Retrieved 4 March 2021.
- ^ Rubin, Gabriel T. (5 March 2019). "Wall Street to Tamp Down on Default Insurance Bets". Wall Street Journal. Retrieved 4 March 2021.
- ^ a b c d e f g h i j Meier, Barry (2009-09-25). "Kevork S. Hovnanian, Construction Company Founder, Dies at 86". The New York Times. Retrieved 2009-10-19.
- ^ Sims, Gayle Nonan (2007-08-15). "J.S. Hovnanian, New Jersey builder, dies". The Philadelphia Inquirer. Retrieved 2007-09-16. [dead link]
- ^ "N.J.: State Report Details Homebuilding Flaws". Daily Real Estate News, Realtor Magazine Online. March 23, 2005.
- ^ a b "K. Hovnanian American Mortgage Review•The Mortgage Insider". Archived from the original on 2010-12-21.
- ^ "Kevork Hovnanian - armeniapedia.org". www.armeniapedia.org. Retrieved 2020-01-06.
- ^ "Kevork Hovnanian, founder of Red Bank real estate firm, dies at 86". nj. 2009-09-26. Retrieved 2020-01-06.
- ^ "Ocean Medical Center in New Jersey Breaks Ground on $85M ED Expansion". www.beckershospitalreview.com. 27 April 2012. Retrieved 2020-04-18.
- ^ Breanne McCarthy, "Ocean Medical Center takes on $82 million expansion project", The Ocean Star (March 1, 2013), p. 12.