Publications

- June 1, 2017: Vol. 29, Number 6

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Climate change and commercial real estate: Risk analysis tool

by Jeffrey Kanne, Darob Malek-Madani and Sam Bendix

National Real Estate Advisors’ analytic tool consists of a benchmark portfolio of 76 commercial property locations around the country, based on the NCREIF Property Index database and CoStar Group data. The benchmark is intended to be a “model” portfolio, with location, age, height and value distributions mirroring average NPI figures.

The model portfolio was sized to represent 1 percent of the value of the NPI. This total property value was then allocated to metro areas across the United States in proportion to their share of the total NPI. The number of properties to include in the portfolio was determined by the average size of properties within each metro area in the NPI. Locations within metro areas were narrowed down based on the total property value within each zip code in the NPI. Individual addresses for representative properties were selected randomly from the pool of existing commercial properties of more than 50,000 square feet in each selected zip code, base

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