TheWrap: The Great Collateral Scramble

I hate surprises. That's why each time we have one of these black swans, I spend the next few years looking for the next one. I spend considerable time reading about the price of gold, imagined AI bubbles and over-priced stock market. But ultimately it's the US dollar itself I worry about. There are just too many dollars out there, whether its hundred dollar bills, Eurodollars or US treasury bonds. If the US government weren't in such deep debt, this wouldn't be such a problem.

The US treasury creates the money it needs to pay its bills by issuing bonds. But it pays 20 cents of each dollar of tax it collects on interest payments. That will come to over $1 trillion in 2026 alone. This has been going on for a while. At some point, we'll reach whatever the "logical conclusion" turns out to be. For now, the Treasury is issuing bonds of shorter and shorter duration. The result is that even when the Fed cuts interest rates, mortgage rates go up.

Where this is leading isn't clear, but many serious economists assume that high inflation will be the first stop along the way. There's simply an overwhelming excess of cash (liabilities) out there which by definition devalues all collaterals (assets). The crazily-priced residential markets we see everywhere are just one expression of a vast, global scramble for quality assets.

Trump may have botched his trade war through indiscipline, but the economists in his team saw it as an attempt to break this cycle. Because America's massive trade deficit is just as unsustainable as its fiscal deficit. In fact, the latter finances the former: China buys US treasury bonds with the money it makes selling the US all of its goods. China is just as addicted to over-production as the US is addicted to selling China its debt.

It doesn't have to end badly for the dollar. Massive AI investment could begin paying dividends, especially if it doesn't kill as many jobs as feared. As for standing up to China, the logical move for Europe and America would be to create a trade union and reaffirm their common geopolitical interests. You know, divided we fall, but united we stand.

It's a nice thought. Just not one I'd bet a lot of money on for 2026.

I can take Corporate Tables requests for ThePrime Gala for the next few days only. On the flip side of that, if you haven’t received invitation you were counting on, now might be the time to order your individual tickets. They’re on sale for CZK 8,500 + VAT at this link.

Industrial developer Demaco has completed DMC 2 at DMC Paskov industrial park on a former coal mine site between Paskov and Ostrava—marking full operational status for the brownfield transformation. As a Paskov native, Demaco co-owner Jaroslav Kaizr leveraged his local knowledge of the location to bring the deal together. Built in two phases since 2022, the facility serves Škoda Auto and Lenzing Biocel Paskov with direct access to PKP Cargo International's rail cargo terminal—the strategic driver for both tenant commitments. Lenzing consolidated warehousing previously spread across five Ostrava locations, with planning and permitting completed in just 15 months.

Something’s going down at CPI, and it’s not just the property group’s LTV. Radovan Vitek’s decision to sell a 50% stake in the city’s most prestigious development site at Bubny in Prague 7 is massive. The buyer is J&T Real Estate founder Dušan Palcr, whose share in JV Bubny was reportedly calculated from the land’s “book value.” Exactly what that book value is hasn’t been made public, of course. The last reported valuation of the enormous site was €563 million. Meanwhile, e15 reports that it was being offered up for less than €400 million. Does the late-December transaction have anything to do with Apollo’s sale of its 3% stake in CPI PG to a “Central European” buyer? What’s clear is that the company exceeded its plan to divest €1 billion in assets during 2025 by €100 million.

INVESTIKA realitní fond’s acquisition of Butovice Offices from Safety Real fund SICAV is an interesting one. By absorbing the 9,100 sqm asset—currently anchored by Albert’s Czech headquarters—the fund going for geographic consolidation in Prague 5. After all, Galerie Butovice, adjacent development land, and the Avenir E office building are already in its portfolio. The new purchase looks like a play for a micro-market monopoly. This deal caps off a record 2025 for the fund, which saw CZK 5 billion deployed across ten properties, pushing its AUM above CZK 27 billion. Back in November, the Czech fund acquired Centrum Południe 3 in Wrocław.

Generali Fond Realit completed the acquisition of three new Lidl supermarkets in Mníšek pod Brdy, Kutná Hora, and Olomouc. The deal was executed in partnership with Star Capital Finance (SCF) under a structure that gives Generali sole property ownership. In all, the portfolio totals 6,816 sqm. Lidl constructed the stores before selling them in a sale-leaseback arrangement. It’s SCF's first collaboration with Generali.

HSF System SK delivered OC Klokan shopping center in Žilina for the investor MC Štadión. The +11,000 sqm facility’s 17 retail units are located in two separate buildings, which sit close to the city’s railway station. For me, the interesting bit is that HSF System used a progressive new 3D concrete printing technology, while installing a green roof over the buildings and planting substantial greenery around it.

Czech fund ARETE secured €30 million in financing from PKO Bank Polski for ARETE Park Rzeszów. The Class A logistics complex offers nearly 90,000 sqm GLA and is fully-leased to LPP Logistics on a long-term basis. That will play into ARETE's strategy of building a stable portfolio on the back of predictable income from strong tenants. The new credit line extends ARETE's existing relationship with PKO BP following an earlier financing agreement on ARETE Park Zgorzelec. It’s another sign that Central Europe is capable of sourcing the equity and financing it needs without looking west (or east).

Prague's Národní dům on náměstí Míru attracted exactly zero bids in the state’s seventh attempt at an electronic auction. Back in 2024, the building’s starting price was set at CZK 760 million, but this has sunk to just CZK 445 million – yet it’s still too expensive. The problem isn’t the location, obviously. It’s just a cold calculation of the renovation premium required. The story is reminiscent of the state’s plodding attempts to sell Palác Broadway. After four years, a buyer was finally found at CZK 878 million. Public buildings here generally have amazing locations, but when it comes to re-development, private investors know all about the CAPEX trap.

Arcona Capital closed a €160 million refinancing agreement for a Czech retail portfolio on behalf of a Prague-based private client. The 13 fully-leased hypermarkets spread across Prague and regional cities convinced two international banks to provide the credit via a 7-year, fixed-rate loan. Strong covenants along with high BREEAM certifications helped Arcona close the deal, which includes provisions for portfolio expansion if suitable investment opportunities emerge.

Luxent Exclusive Properties reports that limited supply is creating upward price pressure for exceptional projects. Rezidence Rubin Palace in Karlovy Vary exemplifies the trend, apparently. All six of the project’s exclusive apartments in this reconstructed 1897 building are sold. In the mountain property segment, premium assets in attractive locations are holding or increasing in value. Older, energy-intensive properties in need of reconstruction are in decline.

CBRE writes that it took part in nearly 20 real estate acquisitions totaling €2.32 billion during 2025. Its biggest transactions included Palladium Praha, Hilton Prague (above €250 million) Kavčí Hory Office Park (+€100 million) and the industrial sale-leaseback Yanfeng Žatec.

-User-First Development: Demaco’s DMC Paskov and the Power of Long-Term Industrial Vision
-Spire Capital Partners agrees strategic capital for BONARD
-Manova sells Amazon Returns Center in Sereď
-Prague Matches London for Retail Openings; US Brands Surge
-Dr. Max extends lease at Prologis Park Prague-Rudná
-Butovice Offices bought by Investika
-Generali buys GARBE Progresus Park Klášterec I
-SPM Invest acquires Campus Science Park in Brno
-UBM Warns Labor Shortage Reshaping Prague Development
-CTP begins construction on ABB’s newest facility
-David Mazáček (Upvest): We’re not trying to replace banks
-GARTAL ramps up output, beginning with City Lofts
-Signal Space raises the entertainment bar in central Prague
-Marketa Vrbasová (Knight Frank): Auto Suppliers Face Indirect Hit from Trade Wars
-Pavel Sovička (Panattoni): Productivity is the problem. Not developers
-David Sajner joins Savills
-Energy efficiency still low in Prague office sector
-Crestyl achieves planning breakthrough on Savarin
-Michal Sotak (Cushman & Wakefield): Emotions drive investment
-Michal Bilý (108 Real Estate): Q2 new industrial leases strengthen
-Robert Ides (ARETE): We’ll recycle our equity abroad