News
Flooding Could Cost CRE $1B/Year by 2050
December 2, 2015
A new report from CBRE is revealing that by 2050 the US could lose more than $1B a year from flood damage to commercial real estate properties.
Multifamily owners in low-lying coastal areas are looking at an average annual loss of over $190M, altogether. And that's before the market disruption from the aftermath of extreme flooding, GlobeSt reports. For instance, New Orleans took years for average apartment rents and revenue to recover from Katrina, costing apartment owners $234M in rent losses between 2005 and 2011.
America tends to be more vulnerable to flooding because we have so many "Gold Coasts" (pictured: Palm Beach), but we don't have the protective measures other wealthy nations in Europe and Asia have. That could end up costing US property owners more in the end.
However, commercial real estate owners can lessen the blow of flood losses by factoring in flooding exposure and potential losses while investing. A few options that could help in high-risk markets include installing emergency generators and sump pumps, and purchasing supplemental flood insurance. Greg Matus of Franklin Street in South Florida also adds that owners should lock in their insurance immediately, because once a hurricane is declared in the region, insurance companies won't bind policies, add coverage or issue renewals. [GS]
