The Europeans are coming: Continental banks double down on CRE lending

Natixis, Deutsche Bank among active firms

New York /
Mar.March 07, 2018 10:40 AM

Deutsche Bank’s headquarters in Frankfurt and John Cryan

European banks are doubling down on real estate lending, and a growing chunk of the money is flowing into the U.S.

“We have capital and we have appetite,” Deutsche Bank’s head of commercial real estate Roman Kogan told the Wall Street Journal. As of September, German banks held $24 billion in U.S. commercial mortgages on their books, according to Trepp, up from $14 billion a year earlier.

French lender Natixis, meanwhile, has emerged as one of the most active property lenders in the U.S. and recently issued a $480 million construction loan for a development in Boston’s Seaport district.

In The Real Deal’s January 2018 ranking of the top 15 construction lenders in New York City, Deutsche placed first with $2.67 billion in dollar volume across nine deals between October 2016 and September 2017.

Banks are issuing more loans in part because Europe’s economy is booming, and in part because post-crisis regulations are loosening. Spain’s Bankia, for example, saw barred from issuing certain types of mortgages following its government bailout in 2012. But now the prohibition has lapsed, and the lender plans to finance construction projects in Spain again.

“It’s a good time to be in the sector; in terms of growth, the cycle still has upside,” Alberto Manrique, who heads Bankia’s construction financing division, told the Journal.

But the uptick in lending comes amid fears that a bubble is building in Europe’s property market. European Central Bank president Mario Draghi in February voiced concern over the market. “We actually see stretched valuations,” he said. [WSJ] Konrad Putzier 


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Lexington Hotel at 511 Lexington Avenue (Google Maps)
NYC hotels getting busier, but still struggling
NYC hotels getting busier, but still struggling
Illustration of Sam Zell of Equity Commonwealth (right) and Barry Sternlicht of Starwood (Illustration by Kevin Rebong for The Real Deal)
Monmouth Real Estate: We’ll sell to Zell, not Sternlicht
Monmouth Real Estate: We’ll sell to Zell, not Sternlicht
Instacart CEO Apoorva Mehta (Getty)
Instacart to build fulfillment centers near supermarkets
Instacart to build fulfillment centers near supermarkets
Blackstone eyes return to hotel business as real estate fuels strong Q2
Blackstone eyes return to hotel business as real estate fuels strong Q2
Blackstone eyes return to hotel business as real estate fuels strong Q2
A rendering of 19 Hausman Street (M Development)
Nightmare darkens for largest Brooklyn condo project of 2019
Nightmare darkens for largest Brooklyn condo project of 2019
Andrew Farkas of Island Capital and 511 Lexington Avenue (Island Capital, Google Maps)
Farkas buys Lexington Ave hotel for $185M
Farkas buys Lexington Ave hotel for $185M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...