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How Investors Are Preparing for Natural Disasters

Damage to residential and commercial real estate caused by natural disasters exceeded $300 million in 2017, and in response, many real estate investors are making the switch to “sustainable and resilient design and construction.” In a post on Forbes, Daniel Neiditch, President of River 2 River Realty discussed what investors and builders are doing to protect their assets from natural disasters, such as hurricanes.

According to Neiditch, many investors are incorporating climate-mitigation strategies into their properties, including seawalls, increasing elevation and adding supplementary cooling systems into their existing properties, “reducing the risk of loss and major business interruptions.”

Neiditch notes that the physical building adaptations to mitigate climate risk are numerous, and “hardening” assets is key to protect against damage from natural disasters.

“Doing so reduces this risk, improving asset efficiency and the tenant’s comfort by creating energy efficient options and other mitigation measures,” he says.

“Investments in climate change reduction are becoming more commonplace, but often need to have additional purposes to justify the expense — like reduced operational costs or improved tenant experience — for insurers to cover damages,” Neidtech adds.

Increased hurricane activity is expected throughout the rest of 2019, according to Colorado State University’s hurricane forecast. The forecast pegs the probability of at least one major hurricane to make landfall along the continental U.S. coastline at 54%, slightly higher than the historical average of 52%.

According to the report, six of the 14 named storms were likely to be hurricanes with two major systems that would carry winds of 11 miles per hour.

Category 3, 4, or 5 hurricanes can cause much damage to life and property. In 2017, Hurricanes Harvey, Maria, and Irma together caused damage worth $265 billion according to data from the National Hurricane Center cited by Bloomberg, making it the costliest hurricane season in recent times.

The Five Star Institute will host its Disaster Preparedness Symposium on July 31 in New Orleans, Louisiana. Natural disasters impact investors, service providers, mortgage servicers, government agencies, legal professionals, lenders, property preservation companies, and—most importantly—homeowners. The 2019 Five Star Disaster Preparedness Symposium will include critical conversations on the response, reaction, and assistance, to ensure the industry is ready to lend the proper support the next time a natural disaster strikes.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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