'Buildings Are Just Gone': Asheville, Thought To Be Climate Safe Haven, Devastated By Helene

A week ago, Asheville seemed to have it all. It was one of the fastest-growing cities in the country with a vibrant arts scene and booming tourism industry. It drew retirees and remote workers who wanted to escape to the mountains, and it was seen as one of the best places to go to avoid the perils of climate change.

In less than 24 hours, all of that was shattered.

The Western North Carolina city and its surrounding area were drowned by the remnants of Hurricane Helene on Friday, and days later, most of the area is still without power, internet or drinkable water. More than 130 people in the Carolinas, Georgia and Florida were killed, and hundreds more are still missing.

The scale of the devastation is unimaginable. Whole towns have been essentially erased from the map. Properties were swept up in the flood waters and carried downstream. No one knows when life will return to normalcy, but everyone knows it won't be anytime soon.

“I’ve been through some bad ones, but not this bad,” said Roger Webb, who owns a logistical company in Asheville called WNC Logistics. “It still looks like a war zone.”

The total economic loss and damage from Helene’s warpath could be up to $160B, according to an estimate from AccuWeather, approaching the $200B impact Hurricane Katrina wrought on New Orleans, one of the costliest natural disasters in U.S. history. 

The true cost of the storm could take months or years to come into focus. But in the near term, members of Asheville's commercial real estate industry are more concerned with the safety of their employees and customers and making it through the week.

At the Cambria Downtown Asheville hotel, the guests have left but rooms are being occupied by employees who need shelter, Alex Fraga, a principal with the hotel's owner, FIRC Group, told Bisnow. 

“I’m stealing water from another hotel’s pool just to flush toilets,” Fraga said.

At least his hotel was able to receive calls. Phone lines appeared to be down when a Bisnow reporter called the Hilton Garden Inn Asheville South, Glo Hotel Asheville-Blue Ridge Parkway and Tru by Hilton Asheville Blue Ridge Parkway.

Nearly 14 million people visited Buncombe County last year, where Asheville sits, an all-time record, according to Visit NC and Tourism Economics. Tourism is responsible for 20% of the county's economic output, and many of the small towns in the mountains popular during leaf-peeping season have taken the worst of the damage.

“Our economy is 100% tourism, and it’s 100% gone,” Peter O’Leary, the mayor of Chimney Rock, a village 27 miles from Downtown Asheville, told WSOC TV.

Austin Walker, a commercial broker with Whitney Commercial Real Estate, manages more than 400K SF of commercial properties in Asheville and said some buildings were left untouched except for roof leaks. Others were lost entirely.

“There are stories of 10K SF buildings pulled off of their foundations and floating down the river,” he said. “There is a significant number of people who got hit pretty bad, and their buildings are just gone and they need another place immediately.”

The handful of people in the area Bisnow was able to reach by phone Monday and Tuesday said they all counted themselves lucky to be alive. The whir of search-and-rescue helicopters overhead has been a constant, as many mountain roads are still closed or impassable.

Tom Green, a broker with local real estate firm NAI Beverly-Hanks Commercial, has been without power for four days and was told not to expect electricity to be restored until Friday. With the number of downed trees that have taken out power lines in his area, he's skeptical of that timeline.

Green had to travel several towns over to fill up a 5-gallon bucket of water from a working spigot to bring to his house. He tried to reach a client for whom he was about to list their space but couldn't get in contact. 

“I haven’t really been focusing too much on commercial real estate,” Green said. “Living out of coolers and no electricity is going to get old pretty quick. If I can’t get ice, then I’m toast.”

Asheville had become a magnet for people moving from the West Coast and Northeast attracted to the city’s progressive vibe and booming artistic community. Last year, Asheville had the second-highest ratio of those expected to move in versus move out in the country, according to Census Bureau data. For every 100 residents who planned to leave Asheville, 329 were expected to move in.

Part of its appeal had been its perceived protection from extreme climate events. Jesse Keenan, a professor of sustainable real estate and urban planning at the School of Architecture at Tulane University in New Orleans, previously wrote that Asheville was among the cities best-positioned to benefit from climate-driven migration.

In an interview on Monday, Keenan said Asheville's growth in the past decade has been fueled partly by those pushed out from the coast due to insurance costs and previous disasters. Helene, which broke records for rainfall and river flow levels, showed that conventional wisdom of a climate-safe area isn't necessarily a safe bet.

“Most of the history of Appalachia and flooding is an oral history,” Keenan said. “Nobody is looking at flood maps like they do in more populous places.”

The area's growth has fueled a small but healthy commercial real estate market. Only 2.4% of Asheville's office space was available after the first quarter of this year, while retail availability was at 1.5% and industrial was 5.3%, according to an NAI Beverly-Hanks report.

Investors spent more than $100M on Asheville-area retail, raw land and apartment complexes in the first quarter of this year, up from $94.5M in Q1 2023. Developers also delivered two new hotels, including The Flat Iron, a 71-room Prohibition-themed hotel with a rooftop bar and hidden speakeasy. 

The centerpiece of Asheville's revival has been the River Arts District, a collection of former warehouses that were turned over the years into an artistic and commercial hub replete with breweries, shops and restaurants. The area was submerged under the flooded French Broad River.

“The River Arts District is gone,” Fraga said.

The financial ramifications of the devastation will linger after the floodwaters recede.

There are roughly $60B in CMBS loans tied to properties within a 50-mile radius of the storm's main impacted metropolitan areas — Tampa, Savannah, Charleston and Asheville — according to Trepp. Asheville alone has more than $1.8B of CMBS exposure at properties that averaged 90.5% occupancy. 

Trepp said disasters can make it harder for borrowers to meet their debt obligations, and nearly 60% of the $60B loans with potential exposure to Helene were on a Trepp watchlist prior to the storm. 

Properties in rural and mountainous areas are less likely to have flood insurance, meaning the rebuilding process will be slower and more costly, Keenan said.

“There's going to be gaps, they're not going to have enough money,” he said. 

Combining that with a preexisting labor shortage, resident displacement, lack of household income and mountainous terrain means a long road back.

“I think this will be comparatively slower than other disasters,” Keenan said.

Walker said Tuesday that he's seen the community come closer together to help their neighbors. He lauded the efforts of Duke Energy and the government responders who have been working on recovery efforts.

“This is my first natural disaster I’ve ever been involved with,” he said. “The people that have left because we have no water and no power feel genuinely distraught about that because they want to be here to help their neighbors.”

Dennis Abbott, president of the Carolinas for property management firm FirstService Residential, said local businesses and nonprofits have been rallying behind each other to get basic essentials to stranded residents.

Abbott said his firm is loading water bottles on a truck to give to residents of communities it manages, including Mountain Air, a gated community in Burnsville where trees, propelled by floodwaters raging down the slope, impaled several units of the building, destroying them beyond repair. 

FirstService put together a $50M fund to help homeowner associations “go ahead and start repairs now on their community rather than having to wait six months, eight months to get settled with the insurance companies,” Abbott said.

After Hurricane Katrina, New Orleans demonstrated the importance of the local government helping to restart the engines of the local economy, said Laurie Johnson, an urban planner and consultant who specializes in disaster recovery for towns and cities.

Johnson said within a year of Katrina, New Orleans reopened its convention center and its football stadium — keys to the local economy.

For now, with no power and no water, that may feel like a distant goal to businesses in Western North Carolina. Several water treatment plants have been knocked offline, with estimates that the system could take “weeks” to repair, the Asheville Citizen Times reported. Other companies’ recovery will lag considerably.

“Small businesses are really vulnerable because they need everything else to come back to business,” Johnson said. 

Keenan said Asheville’s recovery will likely follow other cities that experienced devastating natural disasters. People will continue to flock to the region, just as they have done over the past decade — Asheville grew by 13.4% between 2010 and 2022. Developers will rush in and construct new buildings with stronger storm and flood mitigation. 

Those buildings will cost more money than the ones they are replacing, ultimately pushing up rents on commercial spaces and apartments, Keenan said. 

Some longtime, lower-income residents, already devastated by the flooding, will likely be compelled to sell to deep-pocketed investors and developers, which will make way for higher-density and more expensive developments, Keenan said. 

“There’s going to be huge pressure to develop. [Developers are] showing up in Asheville with millions of dollars for housing. It’s not really going to slow down,” Keenan said. “But what it is going to do is displace a lot of low- to moderate-income people who can’t afford to build. This is happening all over the country.”

Walker, a longtime resident of the area, said he remains optimistic for Asheville's ultimate return, including the River Arts District.

That area initially grew through adaptive reuse, with artists and artisans drawn to the old industrial buildings that have now been destroyed. Now, the area is a blank slate, Walker said.  

“The vibrancy will come back. It's going to take some time,” Walker said. “I think it will be pretty exciting to see what happens down there.”