Real Estate

US Commercial Property Push Backfires for German Lender PBB

PBB bet big on US offices after emerging from state control
Weeks away from retirement, CEO Arndt aims to shore up lender

Germany's Finance Minister Christian Lindner on Real Estate, Economy, Single Market

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By Steven Arons and Nicholas Comfort

February 12, 2024 at 12:23 PM UTC

Updated on

February 12, 2024 at 3:48 PM UTC

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With weeks to go before stepping down as chief executive officer of Deutsche Pfandbriefbank AG, Andreas Arndt is facing a reckoning.

Investors have been fretting over the firm’s loans to US commercial real estate since it cut its profit forecast in November. A hedge fund that only a year ago owned its stock is now betting against it. Things came to a head last week, when its bonds and shares slumped to record lows, after rising defaults in the US property market hit two lenders in New York and Tokyo, sparking contagion fears.