Germany’s Aareal Bank has formed a property management company to deal with distressed loans. Aareal Estate will explore the potential for reworking the assets backing the loans, then selling the property on to institutional investors. The company may keep some of the properties for its own portfolio.
The bank will offer a similar service to other institutions and take on other banks’ bad loans. Rolf Buchholz and Jürgen Hoffman, who have experience in property management and reworking distressed assets for Aareal, will run the firm.
The sale of non-performing loans is a topical issue in Germany, with banks seeking to improve balance sheets and investors looking to buy non-performing loan portfolios.
