When the Berlin Wall opened two decades ago, freedom quickly swept through Germany's largest city. Prosperity, by contrast, was much slower to arrive. After the euphoria of reunification wore off, Berliners endured a recession that lasted almost without pause from 1996 to 2004. Even as imposing new government buildings rose along the stately Unter den Linden, the city of 3.4 million was in an economic funk. Now, as Berlin celebrates the 20th anniversary of Nov. 9, 1989--the day East German apparatchiks threw open border crossings--its status as Germany's hippest and most affordable big city is finally translating into growth. Berlin has become a magnet for Internet and media startups as well as established corporations eager to tap the city's well-educated young people. Drugmaker Pfizer (PFE) moved its German headquarters to the capital from Karlsruhe last year. The top creative people of ad agency BBDO Germany will soon be in Berlin instead of Düsseldorf. And Finnish handset maker Nokia (NOK) has based its mobile mapping operations in Berlin since it bought local software startup gate5 in 2006. "You can recruit people from all over Europe to come to Berlin," says Michael Halbherr, the former chief of gate5 and now a Nokia vice-president.
When the Berlin Wall opened two decades ago, freedom quickly swept through Germany's largest city. Prosperity, by contrast, was much slower to arrive. After the euphoria of reunification wore off, Berliners endured a recession that lasted almost without pause from 1996 to 2004. Even as imposing new government buildings rose along the stately Unter den Linden, the city of 3.4 million was in an economic funk.
Now, as Berlin celebrates the 20th anniversary of Nov. 9, 1989--the day East German apparatchiks threw open border crossings--its status as Germany's hippest and most affordable big city is finally translating into growth. Berlin has become a magnet for Internet and media startups as well as established corporations eager to tap the city's well-educated young people. Drugmaker Pfizer (PFE) moved its German headquarters to the capital from Karlsruhe last year. The top creative people of ad agency BBDO Germany will soon be in Berlin instead of Düsseldorf. And Finnish handset maker Nokia (NOK) has based its mobile mapping operations in Berlin since it bought local software startup gate5 in 2006. "You can recruit people from all over Europe to come to Berlin," says Michael Halbherr, the former chief of gate5 and now a Nokia vice-president.
Berlin real estate is taking a battering from the financial crisis. Investment bank Morgan Stanley has reportedly put the gargantuan Sony Center up for sale and may take a big loss on the iconic complex. When it opened in 2000, the Sony Center on Berlin's Potsdamer Platz was supposed to be a symbol of the capital city's rebirth. Under a giant tent-like roof, thousands of Berliners and tourists visit the complex's massive movie theatre to see first run movies (a film about Michael Jackson's final days opened this week) and dine at its many restaurants. But above the crowds are empty offices and luxury apartments with "for rent" signs discreetly visible. As a commercial venture, the Sony Center has been a disappointment. Sony unloaded its stake in the project in February 2008 for a 150 million euro loss. German news media reported this week that current owner Morgan Stanley Real Estate Funds is now following in Sony's footsteps and is looking to sell the complex for sum less than the 600 million euros it paid just last year. When asked by Deutsche Welle, Morgan Stanley would not confirm the reports, which were first published in Die Welt and the Financial Times Deutschland. Real estate analyst Markus Schmidt with Aengevelt Immobilien described the possible deal as an "emergency sale" by Morgan Stanley, which has been hit hard the global financial crisis and falling real estate prices worldwide. "At the moment, the problem is that the list of potential buyers has shrunk," Schmidt told Deutsche Welle. With banks retrenching and many private equity firms experiencing massive losses, some of the traditional takers for a project of the Sony Center's size are simply not interested in investing, Schmidt said.
When it opened in 2000, the Sony Center on Berlin's Potsdamer Platz was supposed to be a symbol of the capital city's rebirth. Under a giant tent-like roof, thousands of Berliners and tourists visit the complex's massive movie theatre to see first run movies (a film about Michael Jackson's final days opened this week) and dine at its many restaurants. But above the crowds are empty offices and luxury apartments with "for rent" signs discreetly visible.
As a commercial venture, the Sony Center has been a disappointment. Sony unloaded its stake in the project in February 2008 for a 150 million euro loss. German news media reported this week that current owner Morgan Stanley Real Estate Funds is now following in Sony's footsteps and is looking to sell the complex for sum less than the 600 million euros it paid just last year.
When asked by Deutsche Welle, Morgan Stanley would not confirm the reports, which were first published in Die Welt and the Financial Times Deutschland. Real estate analyst Markus Schmidt with Aengevelt Immobilien described the possible deal as an "emergency sale" by Morgan Stanley, which has been hit hard the global financial crisis and falling real estate prices worldwide.
"At the moment, the problem is that the list of potential buyers has shrunk," Schmidt told Deutsche Welle. With banks retrenching and many private equity firms experiencing massive losses, some of the traditional takers for a project of the Sony Center's size are simply not interested in investing, Schmidt said.
