Commercial real estate flood costs in multiple states set to skyrocket
According to a study published by the First Street Foundation, flood damage from climate change could cost the commercial real estate industry $16.9 billion a year by 2052.
The research group produced the report with the engineering company Arup. Both companies are based in New York.
“A total of 729,699 residential retail, office, and multi-unit properties are at risk of flood damage in the contiguous United States,” the study said.
“Annual costs to repair or replace damaged buildings could increase by about 25%, from $13.5 billion in 2022 to over $16.9 billion by 2052 due to climate change.”
Florida, Pennsylvania, California, New York, Texas and Virginia will be among the worst to suffer next year, according to the report.
The negative impact on local economies could reach $63.1 billion in 2052, up 27% from $49.9 billion in 2022.
“Flood damage to commercial buildings could result in 3.1 million days of lost commercial operations in 2022 due to repairs,” the study said. That could jump 29% to 4 million days by 2051.
“Damage to commercial buildings has both revenue and downstream consequences for metropolitan areas and states,” the report notes.
In other real estate news this month, Dana Anspach, president of Sensible Money, explained on TheStreet.com how financial advisors can incorporate income-generating real estate into a financial plan.
“Many rental properties are cash flow positive, but negative or tax neutral,” she said in an interview with Robert Powell of TheStreet.com. model using most financial planning software packages.”
Vanguard Real Estate ETF (VNQ) – Get the Vanguard Real Estate ETF report has returned 33% year-to-date through Friday, including dividends, versus 27% for the S&P 500 index, according to Morningstar.