Both of what you said. You have to be able to design a new version of GE64 levels, and some need significant changes to be made into multiplayer maps that can hold more than 4 people. You need to have source engine experience, and have a portfolio or previous work to show so that we can see that you can design a level that takes gameplay into account, and also that you have a good grasp of technical skills necessary to make a quality source map.
So having good design skills is a good start, but you need to have demonstrable experience making maps for the source engine.