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Evaluating risks: The impact of extreme weather events on real estate assets — an analytical, non-alarmist approach
- April 1, 2023: Vol. 35, Number 4

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Evaluating risks: The impact of extreme weather events on real estate assets — an analytical, non-alarmist approach

by Jane Fear, Maurizio Grilli and Witold Witkiewicz

Climate risk in real estate is no longer a guessing game bubble-wrapped by insurance protections. Managers and investors have more resources than ever to make proactive, informed decisions regarding the longevity of a portfolio. As unpredictable as extreme weather can be, climate risk assessments allow for an element of control. For portfolio management, this control can mean the difference between a successful asset and a flooded one. This is especially true for North American assets that potentially need to withstand hurricanes, extreme heat and rising sea levels. The impact of these extreme events is wide-ranging, not only on the built environment but also on the social and physical infrastructure that support human activity, and these impacts will vary greatly depending on geographical location. Insurance company Aon has estimated that natural hazard–related disasters have caused around $3 trillion of damage during the years 2010 to 2019, approximately 50 percent more than in

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