Rob Verrone (left) and Christopher Herron.
Rob Verrone and Christopher Herron
Principal; Managing Director at Iron Hound Management Company
Last year's rank: 33
The COVID-19 pandemic brought a screeching halt to some firms’ productivity and a tidal wave of deal-making to others. Iron Hound’s business encompasses debt and equity arranging as well as restructuring, and the firm saw the latter offering explode as CMBS borrowers grappled with their loans that were suddenly in the hands of special servicers.
“Starting March 1, we probably had 300 inbound phone calls” from borrowers who needed help, Chris Herron said. “A lot of this was educating people. Even though there was a very big workout cycle following the last recession, there are some who may not have seen this before as CMBS borrowers.”
The majority of the calls — understandably — were for retail and hospitality assets.
As such, since the beginning of March, Iron Hound’s “focus and our time right now is 100 percent best spent on restructuring,” Herron said, adding that “the pipes of the [CMBS] system were not designed to deal with this sort of inflow of defaults and transfers.”
Looking back to 2019, the balance of business was quite different but equally impressive, highlighting the firm’s strength in good times and bad.
Iron Hound arranged $3.3 billion in debt and equity across 23 transactions and $800 million in restructuring volume over 11 transactions. Those deals included a $720 million refinance for Jamestown Properties, Belvedere Capital and Angelo Gordon & Co.’s Industry City in Brooklyn (after also arranging previous rounds of debt on the 6-million-square-foot property); an $80 million refinance for Wells Fargo Place, a 37-story office property in St. Paul, Minn.; a $202.5 million loan for 90 Columbus, a luxury residential tower in downtown Jersey City; and a $204 million loan to The Chetrit Group to refinance its luxury condominium property at 49 Chambers Street in Tribeca.
Unlike how 2020 is now shaping up, “in 2019, there were almost four-to-one debt and equity transactions versus restructuring deals, and that was a natural evolution because legacy CMBS had trailed off,” Herron said.”
What a difference six months makes.
“I think the ROI for Iron Hound at the moment is to focus on the restructuring side of the business until there’s some normalcy in the credit markets again,” Herron said. “It’s a niche space for us that we are very, very good at.” Amen to that.—C.C.
