Market Situation in 2005: Financing Crisis Offers Opportunities The price for older buildings in Berlin in similar locations with similar features, structural soundness, and rental structures fell between 1999 and 2004 from €1,400/sqm to €700/sqm-but rents are increasing. The following chart shows the spread. The situation has developed this way for many reasons: • Continued uncertain economic situation • Successive loss of state assistance since 1999 • Correction of the inflated rents common during the boom up until 1999 • Inflated credit financing • Widespread mismanagement of real estate The resulting fall in prices led to a downward spiral with • Emergency sales and forced sales • High equity-capital requirements for buyers • Restrictive credit policies at banks (Basel II) • Further slump in purchasing demand The PPS concept can use these opportunities to the advantage of renters and investors especially well.