"Sea Level Rise Now" News Digest

Article Synopsis – With climate change threatening to upend the stability of environmental conditions throughout the globe, a wise real estate investor needs to assess the environmental resilience of investment locations. National Real Estate Advisors has created an analytical tool to help assess catastrophic risk related to climate change. They also evaluated individual markets’ climate resilience — in particular focusing on Miami and South Florida, where they believe the outsized risk from climate change ought to preclude institutional investment. According to their analysis, hurricanes and sea level rise pose the biggest threat from climate change. As climate change advances, insurance will continue to become more expensive or unavailable, forcing the growing risk entirely onto building owners and occupants, inevitably leading to decreasing values. Due to South Florida’s vulnerability to climate change risks, National Real Estate Advisors does not invest in nor do they recommend investing in commercial real estate in South Florida.
My Comment – This article does a good job of explaining the risk of investing in coastal real estate in areas that are vulnerable to sea level rise. As more investors start to realize these risks, and insurance rates start to reflect them, the real estate markets will profoundly change in these areas. It appears as if it is already starting to happen. To read the actual article click here.