Publishing date: September 2025

As is the case across European markets, Germany’s real estate owners face the challenge of refinancing a wall of maturing loans in the coming months and years. While many existing loans were written against high property values in a low-rate environment, real estate sponsors now need to secure fresh financing in a market beset by falling property prices and a higher cost of debt.

The change in market conditions has created uncertainty for the owners of real estate in one of Europe’s key markets. It also raises questions for the mortgage banks that remain the biggest providers of real estate financing in Germany – what loan-to-value makes sense in today’s market? And what level of income is enough at a time of rising interest rates?

For non-bank lenders – a group that has traditionally played a secondary role in financing Germany’s real estate – current conditions present an opportunity. As banks manage their books, alternative lenders are attempting to deploy institutional capital in situations where sponsors need to restructure their capital stacks.

Germany is, and will remain, one of the world’s leading real estate markets. But as the sea-change in monetary policy unfolds, and as structural trends in the use of the build environment play out, market participants are forced to navigate a period of unprecedented volatility.

Questions:

• What impact is the high inflationary/high interest rate environment having on Germany’s real estate finance market?
• How popular are Germany private real estate debt strategies among international institutional investors today?
• How are Germany’s private real estate debt managers faring against their international manager peers?
• What risk/return profiles are gaining the most traction in Germany’s markets right now? (senior, whole loan, mezzanine?)
• Which markets/sectors are attracting the most investment capital and why are they enjoying such attention? Regions should be explored.
• What development risks are considered tolerable for institutional capital right now? What risks are considered intolerable?
• What has been the impact of political uncertainty on the liquidity of real estate debt?
• Aside from politics, what macro-themes are informing lenders’ strategies?

Real Estate Capital Europe Podcasts offer firms the opportunity to evidence deep though leadership by focusing on commercial real estate financing of a specific geography.