Hurricanes damage and disrupt communities, properties, and economies in various ways, whether direct, indirect, or both. Translating these impacts into credit risk and other financial implications can be complex. However, a range of tools and analyses enables lenders, investors, and developers to pre-emptively anticipate hurricane damage when a storm approaches, as well as to adjust long-term strategy to mitigate risks and seize opportunities over time.
Until recently, insurance was a straightforward part of commercial real estate transactions—an important component, but generally a simple check-the-box exercise with predictable annual increases aligned with inflation. In the past few years, things have changed drastically, with skyrocketing premiums that have jarring implications for underwriters and owners.
