The Real Deal New York

The Closing: Robert Verrone

The lending legend on the fallacy of ‘Large Loan Verrone,’ Barbie dolls and $20B in debt
By Mark Maurer | July 01, 2016 12:27PM
Robert Verrone (Photo by Studio Scrivo)

Robert Verrone (Photo by Studio Scrivo)

Birth date: August 6, 1968
Family: Divorced; four children
Lives in: Short Hills, New Jersey

Robert Verrone is the founder of commercial mortgage brokerage Iron Hound Management Company TRData LogoTINY, which has arranged and restructured more than $20 billion in debt and equity since launching in 2009. During the last real estate bubble, Verrone gained a reputation as a major risk-taker for providing large, interest-only loans to developers with little equity down. For that he earned the nickname “Large Loan Verrone.” Verrone began his career at Bear Stearns, but after being let go in 1994, he joined North Carolina-based First Union (which later acquired Wachovia and took on its name) to lead the bank’s lending and securitization division. As co-head of Wachovia’s real estate group from 2007 to 2008, he oversaw a portfolio that grew to $80 billion in debt and managed as many as 600 employees. After the market crashed, Verrone started Iron Hound to focus on loan workouts. The 25-employee, Midtown East-based firm teamed up with the Bank of New York Mellon in late 2014 to launch a CMBS lending arm known as IH Capital. Verrone’s biggest deal of the past year was brokering a $403 million loan that Bank of China and SL Green Realty provided for Industry City in Sunset Park.

What were you like as a kid?

I was a typical Italian kid from the suburbs. Played a lot of sports, barely did my schoolwork. I had a big, fun Italian family. I have one sister, but in the small town I grew up in [North Haledon, New Jersey], there were probably 35 Verrones. If you take the surrounding towns, it was probably 100 first and second cousins.

You got involved in a drag-racing game on the Seaside Heights boardwalk in college. What was that like?

Every summer, my family would rent a house there. I would get bored of walking up and down the boardwalk. I became friends with a guy who owned an electronic drag-racing game, and I started working there. I was the guy trying to convince people to play. It was just a great way to meet girls back then.

How would you persuade them to play?

We had a bunch of corny lines like, “Who’s gonna be next? Get set to jet.” They gave away cheap trophies that cost $2, but no one played it for the trophies. They played it to beat their friends.

You started your career at Bear Stearns in 1990. Were you surprised to see the firm go under 18 years later?

I think everyone was surprised. Bear was a phenomenal culture back then. My family is cops, factory workers and haircutters — a very, very blue-collar family — and Bear Stearns was different. There was a lot of pride in the firm back then. The people who joined in 2005 may not have been shocked to see it blow up. But when you were there in 1990 and Ace Greenberg was sending out memos on risk and on saving a dollar on paper clips, you wondered how he got into that position.

What was it like for you when the financial party came to an end in 2008?

To see it all end was very sad, because you really felt that if you could get through this, you’d figure out a way to survive and rebuild it. We had way more wins than losses in our world.

You’ve been painted as a colorful character in a lot of stories, especially during your time at Wachovia. What did those writers not always get right?

People, in hindsight, like to say Stuy Town was a bad deal for Tishman Speyer or a bad loan for Wachovia and Merrill Lynch. They say, “Wow, I can’t believe they lent that much money.” But we had the Who’s Who of the finance world calling us 24 hours a day, trying to buy entire capital stacks. Sometimes you read these books like “Other People’s Money,” and people think we were cowboys. We weren’t cowboys. For each piece of mezz that we created, we had 20 sophisticated, well-capitalized people wanting to buy it. There was a 2006 story in the Wall Street Journal that was sensationalized and added to people’s opinion of Rob Verrone, that he doesn’t eat Brie and has a picture of Tony Soprano in his office. I think that was stupid.

You once sent funeral roses to your longtime client Joseph Chetrit when he went to another lender on a deal. Do you still do things like that?

We were pitching a workout the other day with special servicer LNR. As a joke, we mailed LNR a Barbie doll with a bunch of toy dinosaurs around it because its collateral was surrounded by a bunch of buildings our sponsor owned in New Jersey. My team bought the toys and stapled them onto cardboard.

What was the response?

They didn’t say if they liked it or not. We closed the $55 million deal, though. We don’t take ourselves super seriously. We work hard, and we know how to go to war. You can be in a workout with someone and be screaming at each other, and then two days later, you’re out to dinner.

What’s the best advice you’ve received?

Small clients become big clients. Also, make base hits and doubles. Not everything has to be a home run. That’s a big misconception of that whole “Large Loan” Verrone thing. For every large loan we did at Wachovia, we did maybe thirty $10 million loans.

I’ve heard that you don’t like that nickname. Why?

I hear it all the time. It doesn’t bother me, but I haven’t made a large loan since 2007. It’s time to move on. No one I know well calls me it. Someone who sees me at a cocktail party may say, “Hey, ‘Large Loan.’ ”

Are you married now?

I have been divorced for seven years. I have four kids — two sets of twins, 11 and 14; three boys and one girl. My son Daniel loves Donald Trump. He’s 14, so he could change his mind tomorrow. I’m not a political guy.

What keeps you up at night?

The only thing that would keep me up is worrying about my family. Work is going to be fine no matter what. When you’ve lived through 2008, it’s pretty hard to get scared or worried in business.