(Bloomberg) -- Commercial real estate values are plunging and many borrowers are struggling, but Apollo Global Management Inc. co-president James Zelter sees an opportunity in the downturn.

Asked at the Bloomberg Global Credit Forum in London if he had a high conviction call, Zelter said that “the reorganizing and restructuring and refinancing of the entire CRE universe, you have to be marshaling resources around that.”

The firm has already done big deals in Europe this year. German lender Vonovia SE offered Apollo an unusual sweetener to close a €1 billion ($1.1 billion) property deal earlier this year, with the private equity firm getting about 70% of the dividends from the portfolio despite only buying a 30% stake, Green Street analyst Andres Toome wrote at the time. 

The firm continues to focus on senior lending in general, Zelter said. “We’re doing more investment grade companies. We’re doing more larger companies” as the credit cycle changes, he said. 

“There’s going to be some big fat pitches out there,” he said.

Read: Apollo’s Zelter Skeptical of Soft Landing as Rate Hikes Bite


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