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Alternative lenders are reshaping Germany's commercial real estate financing through whole-loan and stretched-senior structures, according to research presented at the Real Estate Finance Day in Frankfurt. The FAP Private Debt Report 2025, unveiled publicly for the first time on 13th November, found that whilst crisis mode persists, financing appetite for development projects has risen noticeably compared to 2024.
"The willingness among lenders to engage in project developments has increased significantly versus last year," said Kim Jana Hesse, senior vice president at FAP Group. "The top seven cities remain the most popular financing locations." Hanno Kowalski, managing partner, added: "We haven't overcome crisis mode yet, but there are first positive signals. Lenders' view of interest rate levels and loan maturities has become more realistic."
The FAP analysis shows whole loans and stretched-senior financing now dominate activity, establishing themselves as alternatives to traditional bank lending. Mezzanine capital has retreated to niche status. Residential, mixed-use and increasingly hotel projects with viable operating concepts attract the strongest demand.
These findings offered measured optimism against the conference's stark opening. Prof. Dr. Dr. Hanspeter Gondring of the ADI Akademie der Immobilienwirtschaft declared Germany trapped in an "L-shaped recovery" and called for the country's "core renovation." He blamed years of underinvestment for structural weakness and urged market participants to shift from growth mode to crisis mode. Face reality, he argued, and Germany could exit its "valley of tears" by 2030.
Over 300 senior practitioners from banks, debt funds and advisory firms gathered at Frankfurt's Hilton Hotel and tuned in online for what has become the leading conference for commercial real estate financing in German-speaking markets.
The panel examining where financing stands in autumn 2025 brought together Dr. Christian Federspieler of UniCredit, Curth Flatow of FAP Group, Christoph Zapp of PAMERA and Jens Tolckmitt of the VdP. All expressed cautious optimism about new business in 2026. Federspieler stressed that anticipated lending growth would back viable projects rather than extend non-performing loans.
"Lenders are working to avoid repeating past mistakes," said Flatow. "I also think the gap between regulation on the banking side and the private-debt area will narrow over the medium term." With Basel IV tightening requirements on banks, and private debt still enjoying lighter treatment, the expectation is that regulatory asymmetry will gradually diminish.
Legal structuring has also grown more complex. Mike Danielewsky of BCLP and subsequent panellists highlighted how deal structures now require greater legal sophistication. They praised the StaRUG restructuring procedure as enabling deep financial restructuring whilst avoiding formal insolvency.
The collision between stricter requirements for non-performing loans and the approaching refinancing wave dominated discussion throughout the day. A panel featuring Rita Maria Roland of KPMG, Marc Fuhrmann of Fortress Investment Group, Jascha Hofferbert of Silverton Group and Christian Kuffer of Hamburg Commercial Bank examined whether Europe's financing system can absorb both pressures simultaneously.
After lunch the focus shifted to institutional investment strategies, the future of private real estate debt and logistics-sector case studies. In a panel on financing realities, Britta Drexler of Apollo Global Investors, Barkha Mehmedagic of ING Deutschland, Christina Ofschonka of AEW and Mark Wiesner of Eastdil Secured discussed market mechanisms and lenders' changing roles. Further sessions addressed scaling bank-independent financing, exit options and professionalising collaboration between debt funds, banks and institutional capital providers.
The conference’s value lay in its granular examination of capital structures under stress. Whole loans are gaining traction not because they offer better economics than traditional senior–mezzanine stacks, but because they consolidate risk and decision-making with single lenders willing to price and hold that risk. Banks retreating from development finance and mezzanine providers withdrawing after valuation declines wiped out subordinated tranches, have created structural gaps that alternative lenders are now filling, albeit at higher costs reflecting genuine risk.
Gondring’s call to abandon growth assumptions may prove prescient. The practitioners assembled in Frankfurt suggested that realistic pricing, tighter underwriting and new structural forms could restore lending functionality even without broader economic recovery. Whether Germany’s refinancing wall and regulatory pressures allow time for that adjustment, or whether forced deleveraging accelerates before a new equilibrium emerges, remains the unresolved question for 2026. REFIRE's takeaway from the day: capital is returning selectively, but only to structures lenders believe they can control.
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