Retail, office and multifamily properties in hurricane-prone cities with fast-growing populations in Florida, Texas, Louisiana and North Carolina face the largest projected increases in structural damage over the next three decades, according to the study by nonprofit environmental research and technology group First Street Foundation and global commercial engineering firm Arup.
The research also shows that tens of thousands of buildings in New York, Los Angeles, Pittsburgh, Boston and other big cities outside the country’s hurricane belt could sustain billions in damage as the effects of climate change increase.
Commercial properties face up to $13.5 billion in structural damage this year, a number that First Street and Arup project will increase 25% to $17 billion by 2052. Lost jobs and work time could increase the potential economic losses across the country to nearly $50 billion this year, rising to $63 billion within 30 years.
In Miami, potential damage to as many as 26,000 buildings could surpass $1 billion, the highest dollar total in the nation, with New York placing a distant second at more than $582 million in damage across more than 30,000 at-risk buildings.
Wildfires, hurricanes and other catastrophes linked to climate change have been a growing concern over the past decade for the real estate industry and its insurance providers.
First Street and Arup said they expanded their previous annual study, which included only residential properties, to weigh the flood risks to 3.6 million commercial buildings with the goal of providing forecasts and data for businesses, property owners and investors that face billions in potential losses in coming decades.
“As climate change continues to accelerate, flood risk will pose an economic threat to more commercial and multi-residential properties across the country,” Ibbi Almufti, chair of Arup’s global working group on climate risk and resilience, said in a statement.