Last week was the Urban Land Institute’s Fall Meeting.
And every year, the organization puts out a lengthy report, called Emerging Trends In Real Estate packed with commercial real estate information in conjunction with the event. The document is nearly 100 pages long, so there is too much to cover in one column, so we are going to focus on a few key points over a period.
We all hear about the implications of climate change and how it can impact the health of the planet. That also applies to commercial real estate.
The report says that there are major cities in danger of severe flooding.
On a global scale, Los Angeles is rated the third metro area in the world, which would impact $13.3 billion in its GDP. New York City follows right behind, with a $13.1-billion consequence. In the single-family arena, according to the report, there would be nearly one-million homes underwater in Florida, with a financial catastrophe of nearly $413 billion. Obviously, the commercial real estate implications of that scenario are also unfavorable.
In certain areas, where there is a very high investment rate that can impact CRE, this will damage cash flow.
ULI reported that in specific locales, there would be 400 investors from around the world that might tend not to place more of the $25 trillion in assets they have already spent into CRE investments because of global-warming implications.
There are a lot of opinions on the reality of global warming, but when one of the most important commercial real estate organizations in the world is calling out that information, we know it’s a serious situation. CRE investors, owners, and tenants have made big strides in trying to ensure the health of the overall environment, like LEED certification, which is not cheap.
The environment is something all of us need to care about. People have made this a political issue in the past. Commercial real estate owners do not ignore this reality, though. They are actively doing their part to prevent the mistakes that have happened to the environment.