Silberbaum, a prominent real estate group, has filed for insolvency. The group manages 70 projects across 30 locations in Germany, and the reasons for the collapse are multifaceted.
The Hamburg-based real estate group Silberbaum has declared insolvency, as confirmed in a press release. Founded in 2017, Silberbaum consists of 14 companies specializing in the development and management of residential and commercial properties. These companies oversee 70 real estate projects across more than 30 locations in Germany, with a total value in the hundreds of millions of euros.
On Friday, September 6, the group filed for insolvency with the Hamburg District Court. However, the number of jobs at risk has not yet been disclosed. The real estate sector has seen significant challenges, and Silberbaum’s case adds to a growing list of businesses facing financial difficulties in Germany this year.
Rising capital costs and declining demand contribute to insolvency
Several factors contributed to Silberbaum’s insolvency. The company cited soaring capital costs following interest rate hikes that began in 2022 as a key driver. These increases made financing costs untenable for the group.
Additionally, Silberbaum struggled to cope with rising expenses in the construction and energy sectors. Another factor was the declining demand for residential and commercial properties, which further strained the company’s financial position.
Administrator appointed to manage assets and explore recovery options
Following the insolvency filing, Peter-Alexander Borchardt from the law firm Reimer was appointed as the administrator. Reimer specializes in restructuring and insolvency cases, and Borchardt’s team will work closely with Silberbaum to continue business operations while assessing the group’s financial stability.
Borchardt emphasized that the immediate priority is to maintain the real estate operations and stabilize tenant relationships. The team is also exploring options for restructuring or selling off assets in an orderly manner. Cooperation with Silberbaum’s financial backers will ensure continued building maintenance and services.
Insolvency trend continues to rise in Germany
Silberbaum’s insolvency reflects a broader trend seen across Germany this year. According to an analysis by the consulting firm Falkensteg, major insolvencies increased by 41% in the first half of 2024 compared to the same period in 2023.
“The rescue of companies from insolvency is becoming increasingly complex,” explained Jonas Eckhardt, a partner at Falkensteg. He noted that high interest rates and unstable revenues are discouraging potential investors. Eckhardt predicted that this trend will continue, leading to further bankruptcies across various sectors, including a major grill equipment manufacturer and a traditional sausage producer.
Many companies, Eckhardt warned, will need to adapt to survive in the ever-changing global market.
