Majorca Property News

The great wave of distress sales will remain from

As in the past year from the financial crisis was an economic crisis, experts predicted a wave of real estate distress sales. But it did not happen. Why real estate financier even on parts of their credit claims.
"Insolvency administrator and the banks have no interest in Notverkäufen," says Christian Schulz-Wulkow, head of real estate investment division at Ernst & Young Real Estate (RE E & Y). The German bankruptcy law was designed to preserve value, while the banks in any additional losses shy. In addition, the Institute is not by itself Notverkäufe yet property prices verhageln want.
In the boom years from 2005 to 2007 were mainly foreign investors with up to 100 percent debt German property purchased. The economy bloomed. There were rising rents and predicted and resulted in property values, even on the purchase prices were. The banks had agreed in the so-called covenants (credit terms) lending limits and periodic reviews of real estate values. Exceeding the limits of legitimate credit to termination.
These covenants have been often torn, because the real estate values fell. The pressure comes from two sides. Thus, current leases to worse conditions. In addition, tenant bankruptcies are not excluded. In sum, the revenue decline.
Yet the banks still hold, is the real estate industry to hear. This is especially true when covenants are broken, but the eradication rate and still be operated. Then searched for additional collateral. After the shots may be the shareholders. Or it will be distributed waivers agreed - as the "Gherkin", the LAI of a fund held by, the famous London office complex.
Even if interest rates and repayment fail, the banks take no immediate Reißleine. "Basically, the banks prefer a common solution," notes Marcus Lemli, managing director of real estate services provider Jones Lang Lasalle Germany (JLL) firmly. Sun reported Lemlis JLL colleague Christian Ulbrich has a few weeks ago that real estate finance to parts of their loans waived to the owner for further management of the mortgaged property to motivate.