Geopolitical uncertainties, uncertain inflation expectations and higher financing costs are exacerbating the challenges for commercial real estate financing. At the same time, the refinancing needs of many existing properties are reaching their peak. At an online press conference organized by Rueckerconsult, Prof. Dr. Felix Schindler, Head of Research & Strategy at HIH Invest, Stefan Hoenen, Head of Commercial Real Estate at Hamburg Commercial Bank, Fabio Carrozza, CSO of BF.direkt AG, Torsten Hollstein, Managing Director of CR Investment Management, and Alexander Lackner, CEO of neworld, discussed the prospects of the financing market in the second half of 2026.
According to the experts, the market environment remains challenging despite initial signs of stabilization. The interest rate turnaround, lower real estate values and a high need for refinancing are leading to increasing pressure, especially for older financing. According to calculations by HIH Invest, commercial real estate financing with a volume of more than 40 billion euros will expire in 2026. At the same time, the refinancing gap rises to over six billion euros. Office properties are particularly affected, as this is where both the transaction activity of the years before the interest rate turnaround and the subsequent value corrections were the strongest.
“According to our calculations, refinancing needs will peak in 2026. At the same time, the expiring financing is meeting a significantly higher interest rate level and lower real estate valuations. As a result, the collateral and equity requirements for refinancing are increasing noticeably for investors in many cases,” said Prof. Dr. Felix Schindler, Head of Research & Strategy at HIH Invest.
In addition to the increased financing costs, lower market values in particular are making it difficult to obtain follow-up financing for many properties. While debt ratios have risen significantly in many cases, financiers are increasingly demanding additional collateral or equity injections. The experts therefore do not see a classic credit crunch, but an increasing differentiation between affordable and difficult-to-finance properties.
“The willingness to finance is basically there on the bank side, but we see a two-tier market. Various market participants have a high interest in the refinancing of fungible assets, and the conditions are favorable for customers, especially in the core segment. However, this category only covers a small part of the overall market. For many other properties – depending on the risk and location – the situation is much more difficult. More than ever, the quality and location of the property, the leasing situation and, above all, the experience and track record of the sponsor are decisive,” says Stefan Hoenen, Head of Commercial Real Estate at Hamburg Commercial Bank
Residential real estate and high-quality commercial properties in established locations with stable cash flows remain particularly in demand. Financing real estate with structural risks, weak letting or increased repositioning needs is more difficult. At the same time, alternative financiers and credit funds continue to gain in importance.
“We are observing that funds in individual market segments are taking advantage of financing leeway that traditional banks are currently unable to represent. This creates financing opportunities for properties that are basically viable but no longer fit into every bank grid,” said Fabio Carrozza, CSO of BF.direkt AG.
Easing of tensions in the Middle East conflict will not lead to a lasting trend reversal
The geopolitical tensions and in particular the developments in the Middle East were assessed by the participants as an additional burden on the financing and investment markets. Although a sustained easing of tensions in the Iran conflict could provide more confidence on the capital markets in the short term, the structural challenges of the real estate market would not disappear as a result.
“An end to the Iran conflict would help the markets because it would remove an important factor of uncertainty. However, a sustainable revival of the real estate market requires more than individual geopolitical signals of détente. It is crucial that there is more planning security overall, be it with regard to geopolitical conflicts, inflation and interest rate developments or international trade relations,” said Prof. Dr. Felix Schindler, Head of Research & Strategy at HIH Invest.
“However, foreign investors currently view Germany many times more positively than many domestic market participants. International investors in particular are increasingly seeing the current market distortions as an entry window. At the same time, the German institutional market remains comparatively cautious due to tied up capital and existing funding issues,” said Alexander Lackner, CEO of neworld.
Another focus of the discussion was the continuing high number of existing financings, the problems of which have so far only been postponed into the future. Restructuring, renewals and additional capital requirements will therefore keep the market busy for several years to come, according to the experts.
“The biggest challenge at the moment is not new business, but existing business. The market has adjusted to a permanently higher interest rate level and basically knows how to calculate new investments. At the same time, there is an enormous stock of financing and real estate where pricing and adaptation to the new market conditions have not yet been completed. This pent-up need for refinancing is the real ‘white elephant in the room’. Many problems have so far been postponed by extensions or transitional solutions. Until viable solutions are found for these stocks, significant capital will remain tied up and the market recovery will be slow. At the same time, we are observing that investors and financiers are once again making a much greater distinction between individual properties, locations and risk profiles. This return to differentiated pricing is healthy for the market in the long term, even if it creates additional pressure to adjust in the short term,” says Torsten Hollstein, Managing Director of CR Investment Management.
For the second half of 2026, the panelists expect greater risk differentiation in the financing market. Investors with sufficient equity could benefit from more attractive entry opportunities.
