Real Estate Weekly profiles our clients David and Maurice Hornblass of HornRock Properties!
By Caitlin Abdo
One thing you can certainly say about David and Maurice Hornblass, the co-founders and principles of the prolific development company HornRock Properties, is they have remarkable timing.
It was a tumultuous time for the economy, particularly the real estate industry. But where many saw negative housing forecasts, stalled development and an endless glut of inventory American consumers couldn’t afford, the Hornblass brothers saw opportunity.
They were entering the game at the right time, with a clean balance sheet and enough cash to make major deals. The possibilities were endless.
Now that HornRock is developing multiple communities and has expanded on its already aggressive campaign to acquire more than $125 million worth of real estate to develop, that same sense of optimism and willingness to make deals remains one of the company’s defining characteristics.
“We have the ability to be aggressive and to make new deals quickly because we are a private company coming into the market with no debt,” said Maurice Hornblass.
“All we have to consider is our evaluation: is this a good deal? There is nothing to interfere with our logic and there is no red tape to cut through. If we like a deal, we are going to do it. We are at the stage now where we can literally dissect a deal in minutes and determine if it is right for us.”
The brothers’ ambitious style is rooted in their family’s 50-year history in real estate development. They have three generations of family members in the industry whose guidance they can count on and an alliance with Fieldgate Homes, one of the most successful and respected developers in the Canadian market.
Although they were immersed in the real estate business for much of their life, both David and Maurice started their careers on Wall Street.
Maurice was one of 17 people worldwide chosen to join the prestigious sales and trading analyst program at Salomon Smith Barney in 2001.
He excelled in the position, but it was too rigid to be something he wanted to do long-term.
He started buying small apartment buildings, making value-added plays and pursuing a number of other small real estate projects on the side.
He discovered that he had a passion for the business. He soon left Wall Street to pursue a career in real estate development full-time.
David always loved real estate and architecture, but worked on Wall Street while in college and after college, before moving on to work in sales and purchasing at IDT Corp, a publicly traded telecommunications firm.
He made his first real estate deal while living in New York City and striking up a conversation in the elevator with his neighbor who was moving out of town and wanted to sell his condo. David bought the condo, combined it with his own and sold it at a profit.
He soon moved on to constructing multi-family buildings, small hotels and, eventually, large rental projects and commercial properties.
As a consultant, he oversaw the underwriting of more than $2 billion worth of real estate development across the country, from small hotel projects in Harlem to Class-A residential rentals in Houston.
In 2008, the brothers began purchasing notes together, at a time when virtually everyone in the industry was treating them as toxic. Banks were eager to clear debt from their books, so there were a lot of opportunities to make money.
A year later, the brothers saw similar opportunities in the real estate market.
“We decided it was the right time to get into residential construction,” David said. They bought a property in Orange County that would become HighPointe at Woodbury Junction, a 25-home community in the town of Central Valley, NY, that is now more than 75 percent sold.
More recently, HornRock Properties acquired an 8.379-acre site in the tony Morris County, NJ, borough of Mountain Lakes through a distressed asset purchase.
HornRock will capitalize on demand by building a 47-home community in a wooded corner of the town, known as Legacy of Mountain Lakes.
“The Mountain Lakes deal was all about location,” David said. “It is one of the five wealthiest towns in New Jersey and it is at the intersection of Route 80 and Route 287. There are major job centers in Parsippany and Morristown nearby, as well as quick access to New York City.
“And aside from our product, there is nothing new on the horizon there development-wise. It’s a town you can really hang your hat on, a trophy town.”
The brothers are currently evaluating a number of residential acquisition opportunities, including condos, rentals, townhomes, single-family, multi-family and distressed assets in desirable urban and suburban Northeastern locations.
These range from existing assets in need of re-positioning or redevelopment to ground-up developments or partially-completed projects, as well as a variety of joint venture opportunities.
“We are looking for a healthy mix of rental and for-sale projects,” David said. “We design our product for each and every location, so a lot depends on the property we are looking at and the demand and individual tastes of the people in the area. We have the flexibility to do projects with many different designs, ranging from just 20 units to multiple hundreds of units and beyond.”
David and Maurice have a long-term outlook on the market and are willing to make investments they believe will pay off down the road.
Their only rule is the project must be within driving distance of their offices in Paramus, NJ, so they can walk the sites, interact with their buyers and take an overall hands-on approach to their development work.
“We are ramping up on staff right now and aggressively pursuing the right acquisitions,” Maurice said. “We are making it known that we want to be a major player in this industry, but we are also moving forward in a controlled manner.
“People see that we are serious about our goals and the way we do business. We’re straight shooters and we’re looking for the right opportunities.”