'Catastrophic' Hurricane Helene Makes Landfall, Threatens $426B Of Commercial Property

Hurricane Helene slammed into the Big Bend region of Florida’s Gulf Coast Thursday night, strengthening into a sprawling Category 4 storm that made landfall 90 miles east of Tallahassee at 11:10 p.m. ET.

It is expected to have a devastating impact on a wide swath of the Southeastern United States.

The storm is causing sweeping power outages and widespread flooding and had already claimed one life by 8 p.m. when a driver near Tampa was killed by a falling road sign, 10 Tampa Bay reported.

Winds up to 100 miles per hour lashed the city overnight as up to 20 feet of storm surge inundated the Big Bend, a region of smaller coastal and rural towns that was also in the path of Hurricane Idalia just over a year ago.

Evacuation orders have been issued for several Florida counties, and the storm is expected to bring heavy flooding and wind damage deep into the southeastern United States. The eye of the storm is projected to carve a path north through Georgia and past Atlanta Friday morning as a tropical storm before pushing toward Nashville. Flooding was already reported in Savannah, Georgia, and Asheville, North Carolina. 

Helene was projected to cause between $3B and $6B in insured losses, according to a Wednesday estimate from Gallagher Re, a provider of reinsurance. Moody’s estimates that 161,849 commercial buildings with an estimated value of $426B are in the path where winds could rise above 50 mph, risking property damage.

This year’s hurricane season started with dire predictions of more dangerous storms than usual, but then no hurricanes formed for two months, leaving some to question the forecast. But meteorologists have been warning that the U.S. was not yet out of the woods, and Helene is expected to cause catastrophic flooding and an "unsurvivable" storm surge, according to the National Hurricane Center.

The storm’s impact could surpass that of all this season’s previous storms, Chris Lafakis, a climate economist for Moody's, said in a statement. 

“Helene has the potential to be the most severe storm in an otherwise quiet hurricane season, surpassing the economic impact of Francine, Beryl and Debby on the merits of its intensity and the projected location of where it will make landfall,” Lafakis said.  

More than 1 million Florida customers were without power around midnight, according to outage tracker Poweroutage.us, while that number reached close to 50,000 in Georgia. 

In the Tampa Bay metro area, where more than 3 million people live, record storm surge reached close to 8 feet, inundating communities up and down the Florida Gulf Coast. By late evening, coastal parts of Pinellas County, which includes Tampa, saw severe flooding. A video posted to the social media platform X, formerly Twitter, showed water pouring into the All Seasons resort in Madeira Beach. 

The Skyway Bridge and the Howard Frankland Bridge are both CLOSED due to high winds and storm surge. Motorists should stay off the highways. #Helene pic.twitter.com/OAM2aMUPEP

— FHP Tampa (@FHPTampa) September 26, 2024

The high storm surge came while Helene was rapidly strengthening in the unusually warm waters of the Gulf of Mexico. Waffle House, which is used culturally across the South as a barometer for a storm’s potential strength, closed all of its Tallahassee stores ahead of landfall.    

Moody’s counted 61,451 retail properties in the storm’s path along with 35,179 office buildings, 33,606 apartment properties, 28,703 industrial assets and 2,910 hotels. 

“While we are not in the summer peak tourism season anymore, the storm has the potential to upset the Big Bend Coast’s tourism industry,” Lafakis said.

The storm could upend an already vulnerable insurance market that has seen rapidly increasing costs, in some cases doubling in recent years. 

Developers and brokers in South Florida have told Bisnow that rates were beginning to stabilize compared to recent years in the state where residential rates lead the nation. But a powerful storm with heavy property losses would likely upset the precarious property insurance industry nationwide, which the Urban Land Institute said has already put rates at "crisis levels."

The cost of insurance today has already scuttled CRE deals, and an uptick in prices could erase much of the benefit to the commercial real estate industry from the Federal Reserve's interest rate cuts.

Helene, which meteorologist John Morales said is larger than 90% of most tropical cyclones, is expected to have widespread impacts.

Florida Gov. Ron DeSantis declared a state of emergency across 61 of the state’s 67 counties ahead of the hurricane's landfall. States of emergency have also declared in North Carolina, South Carolina, Alabama and Georgia. 

Heavy rains could bring dangerous landslides to parts of the Appalachian states, including areas like Ashville, North Carolina. A flash flood warning is in effect across much of Georgia, including Atlanta, and mandatory evacuation orders were being ordered for specific communities in the state Thursday night. 

“This has the potential to be an extremely rare event with catastrophic flash-flooding that hasn't been seen in the modern era, with major to record-breaking flooding likely,” the National Weather Service in Greenville-Spartanburg, South Carolina wrote. “Numerous landslides are expected in the mountains, with a few large, damaging landslides/slope failures.”

School districts across Florida and Georgia closed on Thursday and Friday, and many roads across the Southeast were already flooded early Thursday afternoon. Helene could also create tornadoes, with Savannah and the South Carolina coast the areas most at risk of cyclones, The Washington Post reported.

DeSantis has activated the Florida National Guard and state officials are helping to coordinate the pre-positioning of around 18,000 utility workers to be deployed against what are likely to be widespread power outages.

The moment we lost power in our section of Perry. Never seen this kind of power loss before. Still waiting for the eyewall. #Helene pic.twitter.com/Og3Wvxbtws

— Don Bell (@DonBellCT) September 27, 2024

Several communities along the western Florida coast are under mandatory evacuation orders, with Wakulla, Franklin, Taylor and Leon counties, which includes Tallahassee, ordering all residents to leave ahead of landfall. 

“This is a very big storm. You're going to have impacts that are far outside of what a spaghetti model would have or what a cone would have,” DeSantis said at a Wednesday press conference in Tampa, the local NBC affiliate reported.

The sheriff of Taylor County, Florida, where the storm made landfall, had a starker warning for residents who didn’t heed a mandatory evacuation order, telling them in a Facebook post to write name, birthday and important information on their arm or leg in permanent marker. 

The reason, he wrote, was “so that you can be identified and family notified.”