Rob Verrone and Christopher Herron

Iron Hound Management Company’s versatility in restructuring loans as well as placing debt and equity deals has paid dividends in a volatile commercial real estate environment.

Iron Hound, which Rob Verrone and Chris Herron co-founded in 2009, gained valuable experience transacting through market challenges such as the Global Financial Crisis and the COVID-19 pandemic, which positioned the company to thrive during the current crisis brought on by higher interest rates. 

In 2023, Iron Hound leaned heavily on its restructuring advisory business with $4.5 billion of volume, the majority of which involved facilitating extensions of maturing debt along with loan modifications that enabled borrowers to implement new capital investments. 

“When we take on a deal, we want to know that our client has an understanding that they have to put some money in to get done whatever we can figure out needs to be done,” Herron said. 

One of Iron Hound’s biggest 2023 restructurings involved executing a two-month extension for Workspace Property Trust’s $1.3 billion CMBS facility secured by a 146-building portfolio of suburban office, light industrial, research and flex industrial properties. Iron Hound negotiated the deal after Workspace committed to investing in leasing operations and building enhancements. 

In November 2023, Iron Hound extended a $151.7 million CMBS loan on Accesso’s IDS Center, a 1.42 million-square-foot Class A office tower in Downtown Minneapolis, nine months after it had transferred to special servicing. The 57-story tower underwent an extensive renovation of its urban park and event space in 2021. 

“Workspace Plaza and IDS are examples of large transactions where the equity stepped up and put in the necessary funds to bridge the gap between 2023 and what we all feel will be a more stabilized capital markets in two years,” Herron said. “They are good examples of borrowers stepping up, and we were able to negotiate those deals to get the time that they needed because there was a willingness to invest new equity.”

While Iron Hound was extra busy over the last year navigating many borrower clients through the choppy waters, Herron stressed that he has encountered situations where restructurings do not make sense even with new investments, which can lead to challenging conversations. It increased its overall restructuring advisory transaction volume by roughly 45 percent in 2023 compared to 2022.

When it came to new originations, Iron Hound secured $550 million of debt and equity placements across 11 deals. The firm’s overall output across restructuring, debt and equity transactions increased 17.5 percent annually in 2023.