The Real Deal New York

Meet the Landlord: Aaron Shirian

Shirian on growing up in real estate, developing Long Island City and tenant horror stories
By Mark Maurer | January 01, 2016 12:00PM

Aaron Shirian (Photo: Larry Ford)

Name: Aaron Shirian
Company: Lions Group NYC
Age: 23
Hometown: Great Neck, N.Y.
Currently living in: Turtle Bay

You are the second generation of a family real estate firm. At what point did you come into the business?

I’ve been immersed in the business since I was born. I was pretty much raised on construction sites. When I was growing up, I didn’t have toys. My dad bought me tools. Since we started developing in Long Island City [in 2004], I’ve been going over architectural plans and interior design, as well as modeling deals and helping [the brokerage] Modern Spaces brand the buildings. I worked there during high school. Even in college — at the Smith School of Business [at the University of Maryland] — I was doing design work for a ground-up building that we’re now building on Hunter Street. I graduated about a year ago. It almost was natural to start taking a leadership role in the company.

Are you running the show?

My dad, Albert, who co-founded the firm with my uncle Ramin, is a builder first. His first project was in Glen Cove on Long Island. He bought a piece of virgin land and literally rented a chainsaw and cut down the trees himself. My cousin Allen [22], my brother Jake [21] and I see ourselves more as developers than builders. Our roles are a lot more about market analytics, modeling new deals and trying to see where the market is going. As far as acquisitions go, it’s me and Allen. We’ll say what kind of deal is best — if it’s going to be a joint venture or if we should buy it straight out.

Your firm is based on Long Island. Do you still have projects there or are they all in NYC?

From the time the firm was founded in 1986 into the 1990s, it was mostly a homebuilder on Long Island. In 2004, we were among the first to begin building in Long Island City under the new zoning. Ever since then, that has been almost all of our focus. I watched the entire transformation, from the first permit we pulled on Purves Street, when it was scary and there were syringes on the street and prostitutes all over the place. Today, it’s pretty much the best block in the area. We have six projects within walking distance of each other in Queens Plaza.

How many rentals does your firm own?

We have about 150 completed units in about dozen buildings. Our rental portfolio is much smaller than what we have in the pipeline. In the next three years, we plan to complete eight buildings with between 800 and 1,000 units — all rentals. The new rentals are pretty much all in Queens. For almost all of the firm’s existence, it was sales. We only recently switched to a rental model. We’ve built about 400 condo units, most of which are in NYC.

Why did you make the switch?

We saw where the market was going and the second generation wanted to hold on to some of what we’re building. It’s a family business, with 12 people in the office. We’re also a general contractor and we run our own construction crew, which is about 60 people.

Has your father been scaling back his role?

Yes, but it’s been natural. We’re building more than we ever were at once. We kind of took on more capacity in anticipation of me being able to handle more on my own. We’re not interested in retirement. All of us will probably die behind our desks and are happy with it that way.

Has the deal size or project scope grown since the firm got into development?

The Long Island City market was so hot then that every deal made sense. Now, we have to run our numbers much more stringently. All of these new units are going to hit the market at the same time because we rushed to get our 421a tax abatement status. [But] it’s very tricky because there’s so much uncertainty surrounding 421a. It definitely makes us nervous and has made us slow down on our buying. Landlords there, for the most part, have owned the property for generations, so they aren’t as willing to budge on prices. You’re seeing asking prices between $250 and $300 per square foot — and fewer developers willing to pay that much.

Do you have tenant horror stories?

We got a call once from one of our tenants on Pershing Crescent [in Briarwood]. She had insects and she needed an exterminator. It sounded very casual. We sent over an exterminator, and about an hour later, he called us saying, “That’s way too much for me to handle. I need to call in some help.” Apparently, food in the refrigerator had been left there for almost a year. It was the last month on the tenant’s lease. The pictures I saw were the most disgusting thing I’ve ever seen — and I watched “Fear Factor.” The exterminator said he identified 11 types of insects. Also, there was a tenant in Rego Park who asked me to find and euthanize a dog that pooped in the hallway. We opted to clean it up instead. We’ve had some good experiences with tenants, too, though.

Why haven’t you moved to Long Island City?

I spend quite a bit of time there and I’m one subway stop away. Two to three years from now, you’re going to walk around Court Square and not even recognize it. I see myself raising my family there at the end of the day.