NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT MANAGERS
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FOR INCREASING VALUE OF
COMMERCIAL REAL ESTATE ASSETS
RESILIENCY
PRINCIPLES
E
VEN BEFORE Hurricanes Harvey and Irma, which together caused $290 Billion
1
in
damage, fifteen of the 30 costliest hurricanes in history all occurred between 2004 to
2013. Although coastal commercial real estate properties in the US face the highest
vulnerabilities to hurricanes, flooding from sea level rise, and seismic zone activity, it has not
slowed down rates of building
2
or population growth. Even though they only account for 10%
of the nation's land area, direct coastlines contain
3
about 40% of the population. From an equity
perspective, the top issues with damage from natural disasters are an inability to generate return
on investment from properties
4
(loss of cash flow), and catastrophic losses
5
from destroyed
buildings. So critical is resiliency to the future of commercial real estate investment, that
investors are looking to resiliency metrics
6
in addition to yields and interest rates for long-term
asset planning. For current investors and property owners, true holistic resiliency is comprised
of three primary considerations: building reinforcements and/or avoiding vulnerable buildings,
advanced preparedness for proactive asset management, and post-disaster recovery planning.
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NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT MANAGERS
Bob Geiger, Principal, National Client Manager,
Partner Engineering and Science, Inc.
