During an eviction, the gunman took several people hostage, including the bailiff. Police believed that one person was dead.
Update: A police spokesman has told Reuters, "We believe that the kidnapper and the hostages are dead."
Witnesses have reportedly described the hostage-taker as a violent man and a hunter in possession of several weapons.
In the south-western German city of Karlsruhe, court bailiffs were in the building to clear the property of occupants by court order. The gunman was facing eviction for non-payment of rent. The eviction was scheduled to take place at 09:00 (08:00 GMT).
The gunman took a bailiff and several other persons hostage. At present the number of hostages is unknown, but police believe that one person has been killed.
A police spokesman has said that they are dealing with an armed man, but have not had contact with him yet. The man barricaded himself and the hostages in early this morning, according to the spokesman.
Police have cleared the area around the apartment building after shots were fired.
Karlsruhe is a city of 300,000 and the seat of Germany's supreme court. Around 70% of its residents rent their homes.