The new owners of One Canal Place, the 32-story office tower at the foot of Canal Street, have filed for Chapter 11 bankruptcy protection less than three months after acquiring the high rise for $28 million.
Brothers Michael and David Shabsels, New York-based real estate investors who acquired One Canal Place in March, placed their sprawling network of companies in bankruptcy on June 5 in New Jersey, reporting assets of between $100 million and $500 million and debts of between $500 million and $1 billion, court records filed as part of the restructuring process show.
The local office tower is among about 80 properties across 24 states, including office buildings, shopping centers, apartments and summer camps caught up in the complex case. It also involves a local lender. Fidelity Bank, which holds a $20 million mortgage on the building, is among the brothers’ creditors.
Attorneys for the bank, the only major New Orleans area creditor listed in court documents, did not respond to requests for comment.
The high-profile case has rocked New York real estate circles. It also raises uncertainty about the future ownership of the building, which is 75% occupied, at a time when the city’s downtown skyscrapers are struggling to retain tenants.
For the moment, the filing is not expected to have any impact on day-to-day operations at the office tower.
Court records show U.S. Bankruptcy Judge Christine Gravelle of the District of New Jersey, who is presiding over the case, signed an order on June 17 walling off One Canal Place’s accounts from the rest of the properties in the bankruptcy. The order clears the way for Corporate Realty, which manages the building, to continue spending the income generated by lease payments on normal upkeep and operations.
“From my standpoint, it’s going to be business as usual,” Corporate Realty President and CEO Mike Siegel said. “One Canal Place, the office building, had no financial issues.”
The Canal Place shopping center and Westin Canal Place hotel, both of which are part of the overall Canal Place development that includes the office building, are owned separately and are not affected by the bankruptcy.
A rapid collapse
The Shabsels brothers began building their real estate empire more than two decades ago by acquiring for-profit Jewish summer camps, mostly in the northeast. They gradually moved into other real estate sectors, taking on ever larger amounts of debt, court records and local media reports show.
Three months before entering the New Orleans market, they raised about $200 million from the Israeli bond market at 7% interest, with the first payment due just a week before they declared bankruptcy.
According to bankruptcy court records and Israeli media reports, their network of businesses had racked up more than $230 million in merchant cash advances — the equivalent of payday loans for businesses — and prompted an investigation by Israeli regulators into diverted funds.
When Corporate Realty announced it had co-brokered the sale in March, the firm said Skysoar Capital Partners, an Israeli investment firm with offices in New York owned by Moshe Meir, had acquired the building and would own it through a company it created called One Canal Place Leasing. The reported sale price was $28 million.
Bankruptcy court records show that One Canal Place Leasing is 90% owned by the Shabsels.
The connection between Meir and the brothers is not clear, but Orleans Parish court records show that a day after the reported sale to Skysoar, ownership of the office tower and the land below was split in two — a common real estate tool called a ground-lease split that allows for the two to be separately owned, taxed and financed.
Court records also show that an entity linked to the brothers borrowed $11 million against the underlying land, which resulted in a pair of mortgages totaling $31 million on a property just purchased for $28 million.
Another Chapter 11
One Canal Place was part of a phased development at the foot of Canal Street undertaken in the early 1980s by Joseph Canizaro. At the time, several new high rises in New Orleans’ downtown area were under construction.
Leah Thayer and David Richards of Saks at Canal Place are pictured with a model of the development in 1983.
The buildings have long served as a high-end anchor for retailers and office workers at a key downtown location. However, in April, the shopping center lost its anchor tenant, Saks Fifth Avenue, after parent company Saks Global filed for bankruptcy. It has since emerged from Chapter 11 and renamed itself Exemplar Luxury Group.
The two bankruptcies are unrelated to one another and to broader operations at Canal Place. Cres Gardner, New Orleans vice president of Beau Box Commercial Real Estate, which is not involved in Canal Place, said the filings don’t seem to suggest any specific issues with the New Orleans development.
“This seems like it’s very much related to an interesting ownership situation with these guys,” said Gardner.
Despite the turmoil among its corporate owners, One Canal Place enters bankruptcy as a relatively healthy building in a fragile downtown market, according to its management.
Office occupancy in the Central Business District was below 80% for a third consecutive year in 2025, according to the annual office market report from Corporate Realty, the same firm that manages the building. Prior to the pandemic, downtown office occupancy topped 87%.
But while occupancy and lease rates have stagnated, One Canal Place landed a major tenant earlier this year, when the Baker Donelson law firm signed a lease for nearly 40,000 square feet across its top two floors, where it is expected to move in this fall.
“There is substantially more income than expenses; it is a functioning piece of real estate,” Siegel said. “This is a very well-capitalized, well-financed, reasonably well-occupied Class A office building. There’s no question of insolvency.”
