CRE Exchange: Commercial Real Estate, Property Valuations, Real Estate Analytics and Property Tax · Altus Group

Dealing with distressed commercial real estate with Shlomo Chopp

·59 min·5 clips

Omar El-Tarai introduces Shlomo Chopp, a seasoned expert with patents, to discuss distressed commercial real estate.

This episode of CRE Exchange focuses on navigating distressed commercial real estate assets and markets. Host Omar El-Tarai of Altus Group interviews Shlomo Chopp, managing partner of Case Equity Partners and founder of Case Property Services. Chopp brings over two decades of experience across investing, advisory, restructuring, and property management. The conversation explores the current landscape of distress, driven by factors like rising interest rates and shifting property valuations. Chopp details his firm's strategy of acquiring troubled assets, often through loan purchases or direct property acquisition. He explains the operational approach of Case Property Services, which manages and repositions these assets. The discussion covers various capital stack positions, from equity to debt, that present opportunities in a downturn. Chopp references specific asset classes, including retail and office, that are experiencing particular stress. He shares insights on negotiating with lenders and borrowers who are facing maturity defaults or covenant breaches. The episode outlines the timeline and capital required for successful turnarounds. Chopp claims a key insight is that true distress often lies in the capital structure, not necessarily the physical property. He argues that many properties with functional obsolescence can be repurposed rather than demolished. A surprising claim is that some of the best investment opportunities arise from other investors' forced selling due to fund redemptions. He highlights the importance of having a dedicated operating platform to execute a business plan post-acquisition. Chopp notes that patenting innovative retail solutions, which he has done, can be part of creating value. He suggests that the current cycle differs from 2008 because the distress is more interest-rate driven and less about credit quality. The tone is conversational and educational, blending high-level market analysis with practical, transactional advice from an operator. The style is interview-based, with the host prompting the guest to share his specific strategies and experiences. This episode would greatly benefit real estate investors, asset managers, and advisors actively looking for opportunities in troubled markets. Listeners seeking a broad macroeconomic overview without tactical details might find it less aligned with their interests.

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