Real estate financing in Germany
Law & Taxes in Germany
German real estate financing is in a state of flux. The traditional players in german practice are being joined by new providers with new financing instruments. Mezzanine financing, crowd lending and real estate bonds are particularly worth mentioning in Germany. Financing gaps can be closed by using such tools. In doing so, investors always have to observe the regulatory requirements.
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Transaction and project financing under german law
We support project developers, entrepreneurs and funds in the financing of real estate in Germany. We advise on traditional bank financing and negotiate and review bank financing on behalf of our clients, including the associated collateral agreements. In the case of leased properties, we also keep an eye on the effects of commercial lease agreements (encumbrances on the property, tenant easements) on the granting of loans.
We also assist our clients during the term of a bank loan under german law, for example, in reviewing disbursement requirements, or in the event of any breaches of the loan agreement or in the prolongation of loans.
We are also familiar with inter-creditor agreements in german practice (agreements that regulate the relationship between banks and mezzanine capital providers, for example), especially with regard to supplementary financing by players other than banks.
In view of the increasingly cautious lending practices of german banks, we are happy to show our medium-sized clients alternative financing models. Here, numerous players are moving forward to take over the role of real estate financier traditionally occupied by banks. Private investors or family offices, for example, come into consideration as capital providers in Germany. Project developers can close the financing gap by means of the following instruments, for example:
- Subordinated loans and participatory loans
- Silent partnerships
- Debt securities (bonds)
- Crowdlending (including regulatory issues)
- Real estate joint ventures
These instruments can be individually adapted to the respective project, enabling our lawyers and tax advisors to develop a tailor-made solution for our clients in Germany.