By Hartwig Benken, Head of Servicing, Germany, Solutus
Germany is working through the most demanding commercial real estate debt cycle it has faced since the financial crisis. A large volume of lending written during the low-rate years is now maturing at a point where values have corrected and refinancing on original terms is often unrealistic. As Head of Servicing, Germany at Solutus, I see these situations at close quarters. What stands out in this cycle is not only the scale of the distress, which is considerable, but the gap between the capital available to address it and the practical capacity required to resolve it. The money and appetite are there; turning a stressed or distressed loan into a workable outcome is the harder part.
The pressure is real — and measurable
This is not a sentiment story. The numbers behind it are clear.
Around €150 billion of real estate financing is due to be refinanced in Germany over the next four years, according to figures reported by property finance publication REFIRE. CBRE’s European Lender Intentions Survey puts refinancing at close to 69% of expected German financing demand, well above the European average. A meaningful share of that debt cannot simply be rolled over on the old terms. That is what people mean when they talk about a refinancing gap — and in my experience, that gap is widening rather than closing.
Against that backdrop, banks have become more selective. They have not withdrawn from the market, but they are underwriting more cautiously, lending at lower loan-to-value ratios and applying tighter tests to asset quality, sponsor track record and exit strategy. Commercial real estate is being priced and treated as higher risk than it was three years ago.
A market that is differentiating, not frozen
It would be easy to describe this as a market that has simply gone quiet. That was closer to the truth in 2023 and 2024. What I see in 2026 is a market that is differentiating rather than seizing up. Transaction activity has been recovering from its lows, and opportunistic capital is actively circling the situations now coming to the surface.
What holds deals back is not an absence of buyers or money. It is the gap between what sellers and lenders believe an asset is worth and what buyers are prepared to pay. Combined with the complexity of resolving distressed positions — often involving multiple parties with competing priorities — that gap can quickly lead to stalled negotiations. Getting from a distressed loan to a completed transaction is rarely simple, and underestimating the intricacies of these situations is where many otherwise credible processes lose momentum.
Why the bottleneck is capacity, not capital
There is a further constraint that does not always receive the attention it deserves. Since the last major wave of distress, many German lenders have scaled back the specialist workout and restructuring teams that an environment like this demands. The balance sheet capacity to deal with problem loans may still exist, but the in-house experience and resource required to actively manage and resolve them has thinned out.
That is where the real bottleneck lies. Working a complex or stressed CRE position through to resolution takes judgement built over time, the trust of every party at the table, and the ability to hold competing interests together long enough to reach an outcome each side can accept. It also requires a clear understanding of how security, enforcement and restructuring work in Germany, and how that differs from other jurisdictions when international capital is involved. These capabilities are difficult to rebuild quickly once they have been reduced, which is why I expect demand for specialist servicing and restructuring support to keep growing.
How specialist servicing adds value
For lenders, investors, sponsors and purchasers facing these situations, the challenge is often less about identifying that a problem exists and more about creating a credible path to resolution. That is where Solutus can add value. As an independent loan servicer and agent, we are able to coordinate between parties, maintain process discipline and keep momentum in situations where objectives are not always aligned.
Our role is to bring structure, judgement and execution capability to complex or stressed positions. That may involve assessing the practical options available, supporting negotiations, managing information flows, coordinating advisers, testing restructuring routes, overseeing borrower engagement, or helping parties progress towards refinancing, enforcement, sale or consensual resolution.
What we bring is the ability to manage the process from beginning to end. We help parties understand where value can be preserved, where compromise may be needed and where decisive action is required. Having worked across a wide range of complex and stressed situations in Germany and elsewhere in Europe, we understand where deals tend to stall and what is required to move them forward.
In a distressed market, resolution is rarely about capital alone. It is about the capability to work a complex position through to an outcome that all parties can ultimately support. I expect that capability to be one of the key dividing lines in the German market over the next two years.
If you are managing, restructuring, refinancing or acquiring a stressed or distressed CRE position in Germany, we would be glad to talk through how we can help move the situation towards resolution.
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Sources
Figures are as reported by the sources below, as at early to mid 2026.
Refinancing volume of around €150 billion due over four years: REFIRE, At €150 billion, Germany's real estate refinancing crunch has plenty further to run — refire-online.com
Refinancing as 69% of expected German financing demand (against 56% for Europe): CBRE, European Lender Intentions Survey 2025 – Germany — cbre.de
