The number of non-performing real estate loans is likely to rocket in the aftermath of the coronavirus crisis, according to a German asset manager specialising in restructuring deals.
CR Investment Management expects a surge in distressed real estate financing deals between now and the end of 2021, pointing to figures from the Federal Association of Loan Purchase and Servicing that suggest non-performing loans in Germany alone could rise from €33bn to €100bn (£88bn).
The firm noted that due to the widespread economic effects of the pandemic, “collection losses on different scales are threatening property owners in every asset class”.
“Even at this time, the market is already showing signs of distress,” said Torsten Hollstein, managing director of CR Investment Management. “Over the next two or three months, we will see a sharp increase in the number of NPLs. This development is not likely to ease up before the end of next year. At the moment, we are receiving first requests to take on workout mandates for real estate financing arrangements and for the properties or portfolios financed through them.”
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