Enough Can Kicking - Verrone Speaks at National Realty Club
All that you’re hearing about money raised and pent-up demand? Don’t believe it, says Iron Hound Management principal Robert Verrone. We joined a larger than usual crowd at the Friars Club yesterday, where National Realty Club members picked the brain of the former Wachovia real estate co-head.
Robert says there’s still a ton of capital out there, but it’s still with the big folks that make the capital—the process of raising money is very difficult. You’ll find plenty of money from the Wells Fargos and Deutsche Banks of the world, but you’ll need a 10% or higher debt yield. Someone needs to take a loss, he notes—we can’t go kicking the can down the road forever, and capital needs to be spent. However, there won’t be blood on the street, so don’t expect any Manhattan assets for $20 PSF. Like a good guest on Leno, Robert got in his plug: Opportunity lies in teaming up with companies like Iron Hound, which know about restructurings before assets go into default—these deals need capital, he says. Over the past 18 months, his firm has closed $2B in workouts, including failed condo deals, which he said has been a great business.