SVP's Real Estate Gambit: Betting Billions on Distressed Assets

GREENWICH, Conn. – December 02, 2025 – In a market defined by caution and rising distress, Strategic Value Partners (SVP) is making a clear and aggressive counter-move. The global alternative investment firm, managing approximately $22 billion, has announced the appointment of Andrew Shore as a Managing Director for its North American real estate team. While a senior hire is notable, it's the context that reveals the strategy: this move is the latest step in an accelerated campaign that has seen SVP deploy over $3.4 billion into opportunistic real estate since the pandemic, capitalizing on the very volatility that has paralyzed others.

Shore, joining from Davidson Kempner after a stint at Ares, brings deep expertise in complex U.S. real estate investments. His arrival bolsters a rapidly growing team dedicated to a singular mission. As SVP Founder and CIO Victor Khosla stated, “Real assets account for about 40% of our investments. Given the ongoing property market volatility, we will continue to lean in to pursue this opportunity.” This isn't just a minor portfolio adjustment; it's a declaration of a core strategic pillar, positioning SVP as one of the most active players in the high-stakes world of distressed real estate.

A Counter-Cyclical Bet on Volatility

While many investors flee from the troubled office and retail sectors, SVP is running toward them with a well-defined playbook. The firm's strategy hinges on acquiring assets at significant discounts—often during restructurings or defaults—and then deploying capital and operational expertise to unlock their value. This approach is evident across their recent, high-profile acquisitions.

In the retail space, SVP took control of Washington Prime Group (WPG), a REIT with over 90 shopping centers, following its post-COVID restructuring. Instead of a fire sale, SVP led a strategic overhaul, focusing the portfolio on a core of 60 resilient open-air centers and injecting $300 million in equity. The move stabilized the company, enabling it to secure over $1 billion in new financing in late 2023 and positioning it for what WPG now calls its “strongest financial position.” Similarly, its recent acquisition of Dublin’s premier Blanchardstown Centre was secured at a valuation reportedly 25% below what it was valued at just a few years prior, with SVP planning significant investment to enhance the shopper experience.

This contrarian conviction extends to the office sector, arguably the most challenged asset class in the post-pandemic era. SVP acquired The Bluffs, a 500,000 sq. ft. campus in Los Angeles's attractive Playa Vista submarket, for a reported $188 million after the previous owner defaulted—a steep discount from its $413 million valuation in 2016. In London, the firm purchased Senator House at a staggering 60% discount from its initial asking price. In both cases, the plan is not to simply hold and wait, but to execute major capital improvements, enhance ESG credentials, and launch aggressive leasing campaigns. SVP is betting that even in a challenged market, demand will persist for revitalized, “best in class” properties in prime locations, especially as new construction stalls.

This strategy directly confronts the market's “debt maturity wall,” with over $1.5 trillion in U.S. commercial real estate debt coming due by 2025 in a high-interest-rate environment. Where others see a crisis, SVP sees a generational opportunity to acquire quality assets from distressed sellers.

Building a Team for Turbulent Markets

The successful execution of such a complex, hands-on strategy requires a specialized team, and SVP has been deliberately assembling a roster of industry veterans. The hiring of Andrew Shore is not an isolated event but part of a broader talent acquisition push led by Mike Ungari, who joined in 2024 to lead the real estate team after serving as a partner at Goldman Sachs.

The team, now 16 strong, reads like a who's who of real estate and credit experts. It includes Managing Directors like Ryan Kaplan, another Goldman Sachs alumnus; Joseph Pontrello from Fortress Investment Group; and Nikolay Golubev and Anders Hemmingsen, who co-lead European efforts with backgrounds from Bain Capital and Deutsche Bank, respectively. The addition of Danielle D'Ambrosio from Barings as Head of Real Estate Asset Management underscores the firm's focus on the operational turnaround that follows an acquisition.

This concentration of talent from top-tier competitors is by design. Navigating intricate debt restructurings, sourcing off-market deals, and managing large-scale redevelopment projects demand a level of expertise that goes far beyond traditional property investment. As Mike Ungari noted in the announcement, Shore's experience will “enhance our capabilities as we continue to address a range of investment opportunities globally.” This team-building effort signals SVP’s recognition that in the distressed space, human capital is the most critical asset for unlocking financial value.

Real Assets as the New Cornerstone

Victor Khosla’s confirmation that real assets now constitute 40% of the firm's investments marks a significant strategic evolution for SVP. Historically allocating 10-20% of its funds to property, the firm has dramatically increased its exposure, diversifying within the category to include not just real estate but also infrastructure, aviation, and power plants. This shift represents a powerful move toward tangible, cash-flowing assets in an era of economic uncertainty.

This pivot is a calculated response to the current macroeconomic environment. With higher interest rates creating widespread dislocation, SVP’s core competency in distressed credit and special situations is perfectly aligned with the opportunities emerging in the real asset space. These assets can offer a hedge against inflation and demonstrate resilience during periods of moderate growth. SVP's model, which favors asset-heavy industries with predictable cash flow, finds its ultimate expression in these tangible investments.

By aggressively expanding its real estate portfolio and the specialized team required to manage it, SVP is providing its definitive answer to the market's biggest questions. Rather than waiting for clarity, the firm is leveraging the ambiguity and distress to build a formidable portfolio. As property owners and lenders across the globe face a painful repricing, SVP has already deployed its capital and is busy executing a playbook designed to turn today's market chaos into tomorrow's returns.