Financing German Real Estate Acquisitions

Yes. Foreign investors can generally obtain financing for German commercial real estate from German banks, international banks and alternative lenders. Decisive factors are the quality and cash flow of the property, the equity contribution, the investor's track record and creditworthiness, a transparent ownership structure and complete KYC documentation. Lenders apply their own criteria, and some have restrictions regarding certain jurisdictions. Fox Capital supports the preparation and approach to suitable lenders; the credit decision always rests with the lender, and financing cannot be guaranteed.

Not necessarily, but it can be required or advisable depending on the case. Some lenders finance foreign acquisition vehicles directly, while others prefer a German or EU borrower, for example to simplify security, enforcement and documentation. Tax considerations also play a role. There is no general rule that a German company is always required or always unnecessary. The appropriate structure is determined together with the investor's legal and tax advisors and aligned early with potential lenders; Fox Capital coordinates this process commercially.

Commercial real estate in Germany is financed by various types of lenders: private and commercial banks, Landesbanken, savings banks and cooperative banks (often with a regional focus), mortgage banks (Pfandbriefbanken), insurers and debt funds. Which lender is suitable depends on the asset class, volume, location, risk profile and the investor's structure; willingness to finance foreign borrowers varies between institutions and over time. Fox Capital identifies suitable lenders for the specific case and does not name general partners in advance.

Typically required are: corporate documents of the borrower and its shareholders, a structure chart up to the ultimate beneficial owners, KYC documents (passports, proof of address), evidence of equity and source of funds, financial statements and a track record of the sponsor, and for the property a rent roll, leases, valuation, technical reports, land register extract and business plan. Foreign documents may need certified translations or apostilles. Requirements depend on the lender and are based, among other things, on the German Anti-Money Laundering Act (GwG).

There is no uniform figure. The required equity results from the loan amount the lender is prepared to provide, which depends on property quality, cash flow, location, asset class, borrower creditworthiness and market conditions. Developments and value-add strategies usually require more equity than stabilised core properties. Gaps between senior debt and available equity can, where appropriate, be bridged by whole loans, mezzanine or preferred equity at higher cost. Fox Capital analyses the specific case rather than relying on general rules.

Senior debt is the first-ranking, secured loan, usually with the lowest cost and a more conservative loan amount. A whole loan combines senior and higher-risk portions in a single facility from one lender, which can cover a higher share of the financing with one set of documentation, at a correspondingly higher price. Mezzanine financing is a separate, subordinated tranche that ranks behind the senior loan; it is more expensive and riskier for the lender. The right combination depends on the business plan and risk profile.

Yes, family offices can obtain financing for portfolios as well as for individual properties. Lenders assess the portfolio's diversification, tenant and lease structure, overall cash flow and the family office's governance and track record. Portfolio financings may allow cross-collateralisation or release mechanisms for individual sales, but involve more extensive due diligence. Transparency regarding the family structure and source of funds is particularly important for family offices. Fox Capital supports the structuring and the approach to suitable lenders.

Hotel financings are generally assessed in more detail than other asset classes because the income depends on operations. Lenders focus on the operating model (lease, management or franchise agreement), the operator's creditworthiness, historical and projected earnings, location, competitive position and capex requirements. A lease with a creditworthy operator is generally easier to finance than a management agreement. Senior debt is often supplemented by equity or, where suitable, mezzanine. Fox Capital supports the preparation of hotel-specific financing documents and the lender approach.

Yes. Logistics and light industrial properties are financed by a broad range of lenders. Decisive factors are occupancy, remaining lease terms, tenant creditworthiness, location and transport links, building quality and alternative-use potential. Single-tenant properties are assessed mainly by the tenant's credit and lease term, multi-tenant properties by diversification and re-letting potential. Industrial outdoor storage sites require a separate assessment of land value and zoning. Fox Capital prepares the case and approaches suitable lenders.

Key risks are interest rate changes for floating-rate loans, refinancing risk at maturity, declining values that may breach LTV covenants, vacancies and tenant defaults that reduce DSCR, unexpected capex, and for developments cost overruns and completion delays. For foreign investors, currency risks and cross-border transfer issues may be added. These risks can be mitigated through conservative structuring, interest rate hedging, appropriate covenants, reserves and sensitivity analyses – they cannot be eliminated entirely.

Fox Capital prepares the financing case, identifies suitable lenders for the specific transaction and approaches them in a structured manner. Indicative offers are compared not only on interest margin but also on loan amount, amortisation, covenants, security, fees, flexibility and execution certainty. Fox Capital supports the negotiation of commercial terms and coordinates the lender's due diligence. Legal negotiation of loan and security agreements is the responsibility of the investor's lawyers. The credit decision always rests with the lender.

Remuneration is agreed individually and in writing before the mandate begins. Depending on scope, project-based advisory fees, monthly advisory retainers and transaction-related success fees, or combinations of these, may be agreed. Fox Capital does not publish fee rates and does not offer free financing services. Remuneration is not linked to a guarantee of financing.