Forecasters are predicting another record-hot summer in North America. What’s hard to predict, though, is how environmental disasters will affect the real estate market around the country.
Intense hurricanes, droughts and untamable wildfires are all playing roles in the increase of premiums—bringing insurance to the forefront of real estate investing like never before.
…which is why we’re talking now, in the latest episode of the AFIRE Podcast, with president and general counsel of EDGE Fund Advisors, Tiffany Sanders. The firm had owned their 1.1 million square foot building in downtown Manhattan for five months before Hurricane Sandy wreaked havoc on New York City in 2013, with tenants that included a major bank and two media companies. “[The property] was supposed to be a low-maintenance dividend-producing machine,” she explains.
What followed Hurricane Sandy was a long and arduous process of recovering from the storm’s aftermath—pumping out water from the building, replacing electrical equipment that had been fully submerged, and repairing damaged interiors. “You can’t turn that stuff back on,” Sanders recalls. “You have to rebuild it.”
For Sanders, the process yielded a better understanding of navigating insurance costs, preparing for the worst, and averting crises—all of which are things other investors may want to consider as we enter uncharted territory this summer. “We underestimate our vulnerability and we overestimate our readiness,” Sanders says.
After four years and $10M in flooding restoration, Sanders recounts her experience dealing with an environmental disaster and redesigning the building to keep tenants afloat post-storm. She also shares what she says other building owners should know about planning for climate disasters in the years ahead.
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The AFIRE Podcast with Gunnar Branson is the official, multiple-award-winning podcast of AFIRE, the association for international real estate investors focused on commercial property in the United States.
Hosted by AFIRE CEO Gunnar Branson, the podcast features informative and in-depth conversations with experts across the full spectrum of real estate, investment, sustainability, economics, geopolitics, and urbanism with a focus on helping each other become Better Investors, Better Leaders, and Better Global Citizens. To learn more, visit afire.org/podcast
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