Bank posts highest loan losses in at least a generation
Bank big in U.S. market
Aareal sees no quick turnaround in market

FRANKFURT, Feb 29 Reuters Troubled German lender Aareal said on Thursday that a quarter of its 4 billion euros 4.3 billion in loans for U.S. offices were likely to go unpaid and that there could be worse to come as a property rout takes hold.

The bleak message underscores the severity of a property slump, hitting the value of empty offices hard and rattling investors on both sides of the Atlantic.

Will the market turn around? It doesn39;t look like it, Chief Executive Officer Jochen Kloesges told journalists.

2024 will remain challenging. We expect that the U.S. office market will stay in flux for longer, he said, adding that some U.S. offices had plunged 50 in value.

Aareal, based in Germany but operating globally with a quarter of its business in the United States from New York to San Francisco, is aiming to pare down about half of the 1 billion euros in socalled nonperforming loans by the end of March.

It said it wouldn39;t need fresh capital as it navigates the crisis.

The sector has been undermined by factors ranging from rocketing interest rates to postpandemic workingfromhome, sapping demand for offices in the United States and Europe. Investors worry this could trigger wider economic problems and spill over to banks.

Aareal is one of the biggest property lenders in Germany, Europe39;s largest economy, and together the nation39;s…