EY-Parthenon anticipates that banks and investors face significant challenges in the German commercial real estate market. According to an analysis conducted by the consulting and auditing firm, the market is facing what EY describes as a “clear market cleansing” due to an impending wave of refinancing.
Krstin Kriemann, a partner at EY, stated that many property owners will either need to inject additional equity or fundamentally restructure their financing. This pressure is arising because approximately a quarter of the large-scale financing held by German real estate lenders is set to mature within the next two years. This statistic is based on a survey conducted by EY-Parthenon across 90 real estate financial institutions and 70 law firms specializing in restructuring.
These refinancing needs are hitting the sector during an already stressful period. Many loans were originally secured when property valuations were higher and financing rates were markedly cheaper. Compounding this difficulty, non-performing loans are increasing; the European Central Bank’s data already indicated that 6.8% of commercial real estate loans were troubled in the first quarter of 2026. Furthermore, over 40% of the surveyed institutions reported being unable to find a viable financing solution in several specific cases.
Korbinian Gennies, an EY partner, noted that this turns the current crisis in commercial real estate companies into a long-term issue. Consequently, survey results suggest that many market participants now do not anticipate a meaningful recovery for the commercial real estate market until the beginning of the coming decade.
