For banks and other holders of commercial real estate loans and portfolios where the asset or the capital structure no longer works. The stage is before default: the loan still pays, the equity is largely gone, and a maturity or a covenant test is in sight. Dry Capital re-underwrites the asset with its local partners, agrees a business plan with the lender and, where required, identifies a potential new owner or JV partner for the position or the portfolio.
Loans written between 2019 and 2022 are reaching maturity in a market where values are lower and money costs more. Positions that still perform today have to be looked at now, while the options are still open.
European debt funding gap for loans maturing 2026 to 2028: refinancing that today's values and lending terms will not cover, with most of it falling in 2026. Office loans make up 41%.
ECB deposit rate after the second increase of 2026, on 10 September, with a further step priced for October.
Ten-year Bund, its highest since 2009, with the five-year euro swap at the same level.
A loan can keep paying while the equity behind it is gone. That window is the S²WAP zone: before default and before Special Assets, while the lender still has choices.
The same loan, the same building, the same month. The outcome depends on whether there is a plan and new capital behind the asset.
The loan is extended and the mark is held at 67. Nothing about the building changes, so the value keeps falling away from the loan and the question moves to the next maturity.
S²WAP: Nothing is fixed. The position is simply carried forward.
The lender takes the asset through the courts. Twelve to eighteen months pass, the value falls further while that happens, and what comes back lands below the loan.
S²WAP: Time is the cost, and the shortfall is crystallised at the worst moment.
The loan defaults and whoever bids sets the outcome. Recovery runs anywhere from zero upwards because there is no plan and no operator behind the building.
S²WAP: The range is the problem. Nobody can price it in advance.
The loan is right-sized to 40, new capital of 27 comes in behind it, and a local operating partner rebuilds the value under a plan the lender has approved.
S²WAP: The lender holds a performing loan at 60% LTV and falling.
The lender, the owner, capital and the local partner each hold one part of the answer. S²WAP puts them around one plan.
Holds the loan and needs a plan it can approve.
Keeps a stake, a promote or an orderly exit under the plan, which is usually a better outcome than a maturity it cannot refinance.
Where the plan needs new capital, Dry Capital identifies counterparties for the portfolio as a whole, which gives them the scale to commit. They assess the positions against the revised plan before they invest.
Dry Capital's asset and development management partners in Benelux, Spain, the United Kingdom and Germany.
S²WAP brings the asset review, the local operating partner and any proposed change to ownership or funding into one plan for the lender.
Re-underwrites on the ground, then runs the business plan.
Decides its position under the agreed plan.
The plan may include changes to the existing loan, new ownership capital, or both, based on current value.
The plan may include a recapitalisation with fresh equity, or a JV partner investing, on the basis of current value and the agreed business plan.
Lenders and other holders of real estate positions engage S²WAP one stage before Special Assets: the loan still performs, the equity is largely gone, and a maturity, a covenant test or a revaluation is coming.
Watchlist loans ahead of a maturity, a covenant test or a revaluation.
Positions that need a revised asset and capital plan.
An asset holding back a vehicle under redemption or extension pressure.
An asset where the business plan or the capital structure no longer works.
Headquartered in Brussels. Each position is worked with Dry Capital's asset or development management partners in the market where it sits.
| Underwriting and business planDry Capital and local partners | Investment management and capital solutionDry Capital | Asset managementLocal asset and development managers | Development and project managementLocal asset and development managers | Leasing and capex deliveryLocal asset and development managers | ExitBank, Dry Capital and the equity | |
|---|---|---|---|---|---|---|
| Benelux | ● | ● | ● | ● | ● | ● |
| Iberia | ● | ● | ● | ● | ● | ● |
| United Kingdom | ● | ● | ● | ● | ● | ● |
| Netherlands | ● | ● | ● | ● | ● | ● |
| Germany | ● | ● | ● | ● | ● | ● |
Who runs Dry Capital, the track record and how to reach us are on the main site.