COVER Chahe Yerevanian took his

FEATURE
familys struggling real estate
development business and
turned it into one of Lebanons
biggest players. Heres how
the company remodeled from
the bottom line up.

By Eliot Stempf

Chahe
Yerevanian
Reconstructing
business

40| Entrepreneur October 2012

T
he turn of the millenium bore ill for
the three brothers of the Yerevanian
family, Vahe, Chahe and Serge. Ara
Yerevanian, their father and founder of the
family real estate development firm, passed
away after months of fighting cancer and
having led the family through a host of other
struggles besides.
Ara had shuffled his family between Paris
and Lebanon with the ebb and flow of conflict
in the civil war, and eventually landed his
family in Canada. The war hardly couldve
come at a worse time for Ara; just three years
before the calamity began in 75, hed been
elected a member of the Lebanese parliament.
Yet Canada cast its own set of troubles
on the familys fortunes. The recession of
the late 80s hit the real estate development
partnership theyd established with the
Armoyan family, a successful Armenian-
Canadian clan. The threat of bankruptcy drove
the Yerevanians back to Paris in 1990. Only the
conclusion of the war offered a reprieve: In
1995, the family returned to Lebanon.
Ara marked the return with a whole new
venture: the development company SAYFCO-
Ara Yrvanian and Sons. Their focus was to
provide affordable housing. Since the 60s
and 70s my father had chosen the middle
income bracket, Chahe says. His slogan was a
home for everyone; he believed that since the
government couldnt help provide housing, he To do so Chahe had to leave his other started but were unable to complete.
would take the task on himself. ventures. Hed been a co-founder in All Taxi, OneEstate.com gave Chahe a unique insight
Serge, the youngest, was still in school; and a far more personal project, the real estate into buyers from the GCCs. He knew there
but Vahe and Chahe joined their father. Vahe portal OneEstate.com. During the time of its was an interest in buying property in Lebanon,
was in charge of managing the construction, operation the website was one of the top real but also how poor the reputation of Lebanese
while Chahe was to cover sales and marketing. estate sites region wide; Chahe reports that developers was abroad. Talk to real estate
Business finally began to pick up for the family. they achieved $15-20 million dollars in sales veterans, Chahe says. Theyll tell you how
From 1994 to 1998, they report averaging a from which the site took a commission. It was often Lebanese were just conning buyers in
turnover of $3 million to $5 million a year. back in the dot com days and the company was those days. Theyd sell the same apartment to
But the death of Ara suddenly tossed the doing well, Chahe recalls. Im not going to say three different buyers. The approach was hit
companys future into doubt. The company we were on the verge of a groundbreaking IPO, and run; lets make a quick buck.
was at the time built around him, and the trust but business was solid. A few clients from OneEstate.com e-mailed
that he himself had personally garnered. No Nevertheless, the connections he made Chahe about his Lazare development project
one knew his sons. The family business had at through OneEstate.com would be the in New Rawda. They received a response
that time taken on more risk than it had in the foundation on which hed rebuild the family within the half hour. Communication: Its the
past, all while the Lebanese real estate market company. But the first item on the agenda, of base line for demonstrating professionalism.
was foundering. The family had just purchased course, was to grapple with the ballooning debt We didnt follow the typical Lebanese way of
$5 million of land in New Rawda paid for and interest rates. The bankers were calling. not following up with clients, Chahe remarks.
entirely by credit. So Chahe sold land and lots of it. Though What the clients found, Chahe believes, is
Saddled with debt and with sales at a the ledger was steeped in red, the company was a level of customer service more in line with
standstill, by 2001 the business was on the nevertheless flush with assets A few thousand the United States or London. The first clients
brink of a collapse. So the family called on square meters went in one direction, ten amounted to no more than eight Bahrainis;
Chahe in 2002 to rescue the business. I thousand in another, fifteen thousand elsewhere. but from their positive experience working
believed, Chahe declares, that if I proved that In short, Chahe hit the reset button on the with the family, they talked. Word-of-mouth
I could take this middle sized family business company. What theyd acquired during their suddenly made Yerevanian a minor brand
that was going through rough times to the fathers tenure was lost; but so too the debt theyd in Bahrain, and then the GCCs at large. As
next level, I could prove that I deserved to be taken on. In doing so he was able to acquire new Chahe notes of the Middle East, if you make
the chairman. financing to finish the projects which theyd one misstep, the client will never come back to

October 2012 Entrepreneur |41

 COVER
FEATURE
you again; if you do well by them, theyll talk
about you to everyone they know.
Chahe followed up the word-of-mouth
marketing and persistent communication
with roadshows when they were launching
a new product. Id go to a hotel, organize
an event, involve the local brokers we
know, and put announcements in the local
newspapers for the project, he recalls. More
and more, people saw that we sold, delivered
on time and with a quality that was greater
than expected. Chahe re-branded their
new success in 2004. No longer SAYFCO-
Ara Yrvanian and Sons, he tucked the
companys real estate development work
beneath the umbrella of SAYFCO Holding.
U
ntil 2005, Chahe kept the companys
focus on middle income housing.
The approach adhered to the
companys past, his fathers original vision,
and the market demand. But he then foresaw
the coming luxury boom.
So we were known as a middle income
house builder, he remarks. But I wanted
to increase our range of products; I wanted
to show that we could be the very best for
even the most luxurious projects. This was
the premise for SAYFCOs project Clouds, a
breakthrough development near Faqra Club.
The 11 villas at Clouds would sell for
between three and twelve million dollars.
When I started, people said I was crazy, says
Chahe. At the time, there were no developers
there; if you were wealthy and wanted a home
in the mountains, youd build your own.
But its success even drove up the value of
real estate throughout Faqra. Prices for land
there were stagnant for ten years at $200
per square meter, he states. In less than a
year and a half, those prices rose to $1,500 per
square meter.
Chahe says he foresaw this effect and
went around buying land nearby Clouds
42| Entrepreneur October 2012
while it was under construction. I bought
over 1.2 million square meters on the only
undeveloped mountain left in the Kfardebian
region; its in proximity to Faqra club. The
property is as large as Solidere, he boasts.
My vision there was the Ahlam Golf Resort.
At this stage he sold part of the company to
his now ex-partners, who would continue
with Ahlam. But he kept 200,000 square
meters to develop the resort Eden.
M
oving his firm in the luxury
direction, and at a time when
luxury real estate developments
werent yet seen as a sure-fire moneymaker,
required carefully crafted conversations with
the rest of the family. And while Chahe didnt
have to pitch his vision to a boardroom, he
did need his brothers on board.
My older brothers vision was completely
different, Chahe says. He believed we were
taking on too much risk. But after I cleaned
up the company, I was able to sell him on my
ideas for the future.
His younger brother Serge was more
receptive to the direction Chahe was driving
the company. At the time, Serge was back
in the United States. Hed graduated with
a masters from the University of Texas at
Austin, and was working at JP Morgans
Houston, Texas offices.
Chahe asked Serge to return to the family
business. I needed a strong right-hand man
financially, who also shares my vision, Chahe
remarks. Serge understood my vision, and
knew that he could provide that financial
backup that I needed.
Together, he and Serge have recently
bought out their older brother Vahe. At the
end of the day, not all families stay together
in business, Chahe notes. Though they still
stick together as a family.
Negotiating brotherly relations requires
a deft touch. For nothing quite can damage
relationships with friends and family like
money especially when each brother bears
a strong personality. You have to be flexible,
you have to be a good listener, and you have
to understand them where theyre coming
from, Chahe advises. You have to analyze
how they think, and put your idea in terms
they understand. Put the same idea in
different terms and theyll come back, asking
Just who do you think you are? When I
believe in an idea, I go for it. But with people
that are on your side, your investors, your
friends and family, you cant dictate. At the
end of the day, Im managing managers.
C
hahes aim throughout has been to
create a real estate development
brand; he cites Apple as his
inspiration. When Steve Jobs made a new
product, everyone stood in line. Im certainly
not comparing SAYFCO to Apple, but today,
whenever we have a new project, we sell one
third of the units without any plans even
drawn up. This is why I believe in branding.
Whereas Apple designed its products to be
user friendly, SAYFCO goes for client friendly.
The rapid response he delivered to the
Bahraini customers early on in his position
as CEO of the company remains a hallmark
of his focus. Chahe went for quality
headquarters, nice development designs,
trustworthy construction and product
delivery thats always on time.
A regular challenge is to increase his
brands presence on the market. Maybe I can
do two to three projects a year but not 20.
With the financial limits that I have at the
end of the day, how do I grow exponentially?
Chahe asks.
So SAYFCO began offering service
agreements with landowners: Rather than
purchase the land, SAYFCO takes charge of
the propertys development from start to
finish. A landowner will come to me and say
listen, I want the SAYFCO brand, Chahe
remarks. I say fine, but it has to be a SAYFCO
project. That means I design it, I build it, I
market it, and I put my name on it.
Through these agreements, SAYFCO has the
opportunity to work beyond its means through
the strength of the brand. Whereas they now
offer new projects in the single digits, Chahe
expects them to be able to offer well over 20,
perhaps even 50 projects each year.
Im not greedy, Chahe declares. At the end,
I give the landowner the keys and the profit.
Our first such agreement secured three to four
times the landowners original investment.
U
ltimately Chahes ambition is for
SAYFCO to be the dominant real
estate developer; he wants the
company to be the first to come to mind
when anyone is looking to buy a home or
office space. Getting there means getting the
name out. A commitment to professionalism
is step one; increasing the array of projects
to get their brand on more buildings is step
two. An exceptional, adequately funded
communications plan is step three.
Chahe has pursued the traditional
routes here. Across online news portals
such as annahar.com, lorientlejour.com
and lebanonfiles.com, hell secure the main
banners. You of course have to pay for it, he
says. But well invest maybe $40,000-50,000
a month to get our name out there, so that
people keep seeing the SAYFCO brand.
Though his focus (and pride), curiously
enough, is the companys activity on
Facebook. The social networking site has
typically posed a challenge to businesses:
How do you take advantage of the fact that
just about every single one of your potential
clients has a profile? And for real estate, the
challenge is particularly acute. Homes and
offices are rarely impulse purchases trending
across Facebook and Twitter news feeds.
Real estate projects take years to come to
fruition, and only small, set number of people
can actually enjoy the buildings those
who are the buyers. A ten unit residential
development means ten families at most.
And each of those ten families will generally
come to the decision to buy that home only
after a lengthy decision-making process; its
not the sort of product you add to cart and
pay by credit card. Homes arent iPhones.
Yet Chahe has placed an immense
emphasis on his companys Facebook page
and at the time of this article, he has well
over 1,600,000 likes. Theres no real estate
company in the world that has anything near
that number. A Youtube video advertising a are between the ages of 18-24. There might only
recent development in Faqra garners nearly rarely be buyers in this age range, but they,
35,000 likes in less than a week; photos posted Chahe believes, are his future clients. This is
of a completed house might get 47,000 likes how you create a brand: When a guy finishes
and over 3,000 comments. university, gets married, and starts searching
Getting those fans on Facebook hasnt for a house, the first place hell look is SAYFCO.
been cheap. Chahe estimates that each like His aspiration and efforts are paying off.
costs the company over a dollar. We started SAYFCO today sells more than 500 units per
with a few hundred friends, he recalls. year. And as Chahe sees it, theres only room to
Kickoff was slow. So Chahe devised a plan grow from here.
to get peoples attention: Everyone who
liked the page would have the chance to
win a drawing for a $1,000,000 apartment.
Suddenly their fan base exploded. And he
kept up the Facebook-based deals. Fans,
for instance, might also receive a $25,000
discount on apartments going for $225,000.
Despite the cost, Chahe believes that
these numbers are invaluable. When I
advertise a project on Facebook, 1.6 million
people are there, seeing it on their screen.
No other media out there can match it. And
with the expat population fivefold that of
the Lebanese population actually living in
Lebanon, we can reach maybe five, six, or
even seven million.
Around half of those who like the page
The power of
positivity:
Stay positive, keep
going, and feel that
positivity. You have to
envision what you want
to achieve. When you see yourself there, thats
when youll get there. When you convince your
subconsciousness of that positivity, thats when the
opportunities come call it the miracle life. But it
has worked for me. Im fortunate to come from a
good family, a strong base, and have the company
of my father. But I took a company that was in
trouble and cleaned it. Others have taken much
healthier companies and sunk them. All of thats
achieved through persistence and positivity. Believe
in yourself, so that others will believe in you.