Mr. Elghanayan, 34, is president of the Rockrose Development Corporation, a New York developer and manager of residential and office buildings founded by his father, H. Henry, and two uncles. In a split three years ago, Henry retained the Rockrose name and his brothers formed TF Cornerstone.
Interview conducted and condensed by
VIVIAN MARINO
Q. You didn’t start out in real estate.
A. I taught English — 10th and 11th graders — at a low-performing public high school in Manhattan for two full years. It was truly an amazing experience and definitely the hardest thing I’ve ever done but incredibly rewarding.
Q. Did your father persuade you to leave teaching?
A. He never pressured me or really influenced me at all, except insofar as talk to me about the fun aspects of the business. I eventually decided to try it, and then I really liked it a lot and so I sort of changed paths.
Q. And you’ve held many different jobs at Rockrose since joining the company in 2005.
A. I’ve had a lot of different roles at the company to develop the tools and the prowess I would need to run the company. I’ve been a field super; I’ve been project manager; I’ve done commercial asset management. The process of learning has been fun, but I’ve now found that the process of running things is even more fun. I’ve started to become one of those people — who I used to hate — who love their job so much.
Q. You were named president in April. Is your father scaling back so he can eventually retire?
A. He plans to work as long as he can, which I think is going to be a very long time.
What we’ve done is somewhat divide our focuses in the company. I’m focusing on construction, new development and residential acquisitions, and Long Island City in general. Henry is focusing on the commercial department: commercial acquisitions, financing, accounting, H.R. — the guts of the business. So we’ve developed a healthy balance that’s working out nicely. We’re co-running the company — we’re equals.
Q. Yes, but there is, of course, the issue of succession. Industry observers believe that was the main reason behind Henry’s split from his younger brothers.
A. I think that that is right to an extent. But I think it’s more so to clear a path for a good relationship. I actually have very, very good relationships with my cousins, as I did before.
Q. So there has been healing in the families.
A. Oh yeah, yeah. Definitely.
Q. Let’s move on now to your project in Long Island City, at Court Square.
A. It’s an 1,800-unit residential development — it’s sort of grown over time as we bought more parcels and pieces. It’s right on a massive amount of transportation in Court Square: the E, M, 7, N, R, G. It’s just this sort of unparalleled transportation hub, and the views are incredible. You’ve got water views and Manhattan skyline and there’s also a strong, incipient cultural movement in that area of Long Island City. There are a lot of arts institutions.
Q. What’s the status of the first building there, known as Linc LIC?
A. The first building has 709 units. It’s topped out, so the superstructure’s complete and we’re just doing the innards. Those will be rentals. We expect to be leasing in the spring.
The next phase will be on a very large block directly adjacent. We own most of three blocks that are right there. There will be about 1,000 units that might actually be in two phases. Those will be rentals. Then the final, smaller phase will be probably around 75 or 100 units, and that’s down the road.
Q. What’s the timetable for the entire project?
A. We’ll be starting construction for the next large building in the middle of 2013 and be done a year and a half after that. We’re still working the development timetable for the third building.
Q. What will rental rates be like at Linc LIC?
A. It’s kind of a moving target, because we keep setting the rents in our minds, then the rents are going up dramatically, 6 to 10 percent year on year. And that’s a real thing. So right now studios are around $1,900; one-bedrooms are round $2,600; and two-bedrooms are like $3,400. It’s going to be mid-$40s per square foot. It’s about 25 percent off Manhattan.
Q. You also directed an effort to transform 300 Park Avenue South into a creative arts building.
A. It’s almost 100 percent leased. It’s become this special, unique building. We have the Smithsonian, Leo Burnett, the Whitney, Wilhelmina Models and various other high-profile tenants. It’s a very hot time for that location.
Q. What are rents like there?
A. We’re probably around $50 a square foot. We designed the whole building to be vacant as of the beginning of 2011 and since we started the leasing process, I would say that rents have jumped around 20 percent.
Q. What else is Rockrose working on?
A. We purchased several office buildings in Washington, D.C., as well. And we’re actively looking for more, both in New York and Washington. We’re actually right on the cusp of several acquisitions on the commercial and residential side.
Q. What are your goals at Rockrose?
A. For the most part my vision is to just keep what we’ve always done and do it as well as I can.
We do want to take on investors. For the most part we haven’t done that. It’s just a different way to get capital. We’re open to institutional investors and private funds.
Q. Do you ever see Rockrose partnering with TF Cornerstone?
A. You never know.
