Real Estate Solutions

Real Estate Financing Under Scrutiny

Solutions for Lenders and Investors

Fenced-off vacant lots, half-finished buildings, zero signs of construction. When developers run into financial trouble, project planning and execution grind to a halt. This also puts intense pressure on financiers, as banks and mezzanine lenders have a vested interest in seeing their investments become concrete reality.

The Challenges

Rising construction costs driven by volatile supply chains and material shortages.
Macroeconomic and geopolitical strain resulting from the war in Ukraine.
Skyrocketing energy prices, inflation, and interest rate hikes.
Increased financing needs for developers combined with lower-than-expected revenue projections.
Plummeting asset values where potential land and development values drop below the original purchase price.

As a result, developers often cannot repay their lenders as planned. This creates an immediate risk of massive devaluations, delayed repayments, and outright defaults.

Lenders must put their real estate financing under the microscope. The experts at Drees & Sommer tackle this the following way:

Step 1: Determine the status quo.

Step 2: Map out the consequences using hard facts and data.

Step 3: Recommend a property-specific solution.

Our consultants deploy a variety of tools and synthesize the results based on exact client needs. This guarantees a completely holistic view. We rely on proven methods, including market and location analyses, market value appraisals, cash flow modeling, technical due diligence, project monitoring, building law analyses, and restructuring measures.

Achieving Your Goals Through Real Estate and Engineering Expertise

Drees & Sommer advises lenders and aims to secure their capital and drive transparency in a highly complex market. Our team combines detailed real estate and technical engineering expertise to recommend individual, actionable alternatives.

Benefit for Lenders

Accurate valuation of properties currently under development.
A powerful combination of commercial real estate and technical engineering know-how.
Local market expertise backed by 59 locations in Germany alone and the extensive global Drees & Sommer network.

Let's talk.