Commercial Property Turmoil in USA Weighs on German Banks as PBB Posts Net Loss and Aareal Profit Declines 23%

March 6, 2026: Two of Germany's top property banks reported weaker financial results for 2025, citing troubles in the United States' commercial property market as they focus more on Europe .

Deutsche Pfandbriefbank's Exit from U.S. Market

The German property financing lender Deutsche Pfandbriefbank on Thursday posted a net loss of €284 million ($329.33 million) for the year, compared with a profit of €90 million in 2024, as it withdraws from the U.S. market .

PBB had warned last month that it was unlikely to meet its key financial targets for 2027, citing the drag on momentum from a subdued commercial property market this year .

Aareal Bank's Declining Profit

At the same time, lender Aareal Bank reported a 23% decline in profit to €137 million in 2025 from €179 million in 2024, and said it wants to reduce business in the United States .

Privately owned Aareal said that its non-performing loans of $1.1 billion were mainly for U.S. offices, and that it took additional charges of €55 million .

CEO's Comments

"We will remain active there but want to reduce U.S. office property loans faster than originally planned," said Aareal CEO Christian Ricken .

"In the face of heightened geopolitical and macroeconomic uncertainty, Aareal Bank will continue to pursue a cautious and prudent risk policy," the bank stated .

US Commercial Real Estate Challenges

The U.S. has been suffering from high office vacancies and falling property prices, particularly in the office sector, as hybrid work patterns and economic uncertainty continue to weigh on demand for commercial space. These challenges have created ripple effects for international lenders with exposure to American commercial real estate assets .