Over the past decade, the increasing frequency and severity of extreme weather events has focused attention on resilience—the ability of cities to prepare for and bounce back from adverse events.

“For cities the question becomes, what are the vulnerabilities?” said Eileen Marrinan, director of research for Grosvenor, speaking at a session at the 2015 ULI Fall Meeting. “How severe are they, what are the resources to grapple with them, and how can cities improve their resilience? And for the real estate community, the question is, how can we understand the resilience of cities where we’re active?”

Related: Returns on Resilience: The Business Case

Marrinan said Grosvenor ranked 50 cities across the globe in its recent Resilient Cities Research Report, looking at a range of areas in which they are vulnerable and at the resources they have to cope with those vulnerabilities. The goal was to incorporate resilience considerations into the company’s capital allocation process.

Aidan Hughes, principal and San Francisco group leader at Arup, said his firm has been working with the Rockefeller Foundation to develop tools that enable cities to look holistically at their own resilience in order to shape urban planning, practice, and investment.

Arup defines resilience as the capacity of cities to function so that the people living and working in them, particularly the poor and vulnerable, can survive and thrive no matter what stresses and shocks they encounter. “Oftentimes we think of resilience in terms of shocks—earthquakes, floods—but we don’t think in terms of stresses: ongoing situations such as poverty and housing shortages,” Hughes said. Drawing on Arup’s City Resilience Framework, the Rockefeller Foundation has created the 100 Resilient Cities program, funding municipal resilience officers in cities across the globe to measure the resilience of their cities. “The next step is to create the City Resilience Index to start to measure performance against specific metrics,” Hughes said.

Jake Albini, manager of real estate development for the Jay Paul Company, spoke of resilience at the individual building scale. Jay Paul is developing 181 Fremont, a 70-story mixed-use tower in San Francisco with Class A office space topped by residential condominiums. Jay Paul asked Arup to develop an innovative alternative to absorbing seismic and wind loads. The conventional solution—a tuned mass damper—would have taken up the top two floors of the building. Instead, Arup proposed incorporating viscous dampers into the building’s diagonal mega-braces, freeing the top two floors to be sold as penthouses. In tandem with uplifting mega-columns, this strategy created a highly elastic design.

Arup is using 181 Fremont as a test case for the Resilience-based Earthquake Design Initiative (REDi) rating system it is drafting, with certification levels similar to those in U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) system. Although meeting all the REDi requirements involved additional measures that increased costs, Jay Paul saw the potential for insurance savings and marketing advantages. “Also, it can quantify what the financial loss will be in the event of an earthquake,” Albini said. “And at the Gold and Platinum levels, it will ensure that your building will be reoccupyiable immediately after an 8.0 earthquake.”

Stephen Gaitley, partner and real estate practice leader of Woodruff-Sawyer, spoke of the effect of catastrophic events on insurance. “There is an inordinate amount of capital in the insurance community,” he said. “In the past three years, the returns have been spectacular. It’s a very competitive environment—we’re seeing year-over-year rate reductions—and that’s being driven by the lack of natural catastrophes in the last three or four years.”

Of the largest natural disasters over the past 25 years, the 1989 Loma Prieta earthquake, the 1994 Northridge earthquake, and Hurricane Katrina in 2005 had the biggest impact on the insurance and reinsurance markets, Gaitley said. “After these disasters, primarily Hurricane Katrina, there was a significant spike in insurance and reinsurance costs to the real estate community.”

Gary Holtzer, senior managing director and global sustainability officer for Hines, spoke about his company’s resilience-related considerations when making investments. In emerging markets in particular, Hines considers the transparency of the government and the ability of the government to respond to shocks.

“New York City’s lower Manhattan is very vulnerable,” Holtzer said. “But the government has a high ability to rally, respond, and form public/private partnerships to get the mass transit, water, and sewage systems running again.” In India, the power grid is so unreliable that Hines makes sure its buildings can operate without public power if they need to.

Sustainable design strategies have become much more common in the past ten years, driven by tenant demand, which is likely to drive the incorporation of resilience measures as well, the panelists said. However, Holtzer added a note of caution: “Companies like ours have the resources and we have sophisticated investors who understand the importance of resilience. There are a lot of smaller companies that don’t see the value.”