Private Credit Losers Emerge From Ruins of German Property Bust

It was a “trailblazing” project - and for the two small pension funds that helped finance it, a chance to prop up the retirement savings of dentists and pharmacists in rural northern Germany.

Yet shortly before “Canyon,” an office development wedged between Frankfurt’s red light area and its banking district, was scheduled to be completed, a pile of sand with a pop up beach club is all they have to show for their investment. That and tens of millions in writedowns that have forced them to tap reserves.

The two funds aren’t alone. As creditors work through the ...