A CNBC report follows a new brand of tech companies using advancements in technology to track how climate change could impact real estate in the not-so-distant future.
The report states that a joint study from Heitman and the Urban Land Institute title, "Climate Risk and Real Estate Investment Decision-Making," revealed real estate markets “are far from understanding climate risks enough to price them in today.”
Additionally, companies are turning to high-tech data analysts who can go well beyond current flood maps to forecast climate risks for real estate.
Rick Sorkin, CEO of Jupiter Intelligence, was asked in the report what he thought of the water surrounding the island of Manhattan, his response: “It’s beautiful, and it's incredibly dangerous.”
Jupiter, whose clients include the cities of New York and Miami, Florida, is a startup tech company backed by $40 million in venture capital.
“We’re seeing a dramatic expansion of large corporations coming to us and saying, ‘we need to understand the risks in this office complex, the risks in this hotel, or the risks in this neighborhood, where we have hundreds of millions of dollars of mortgages out,” Sorkin said.
Jupiter analyzes properties, using predictive data points and then gives clients a risk score, forecasting up to 50 years into the future.
Analyzing data to prepare for a disaster is key, and it was among the topics discussed at the Five Star Institute’s Disaster Preparedness Symposium, held on July 31 in New Orleans, Louisiana.
Jody Gunderson, EVP of National General Lender Services, who also moderated a panel on disaster data during the event, said both insurance and mortgage industries “have more information than event” to identify the impact of natural disasters.
“Meteorological forecasts have become more accurate and are able to discern potential events, especially hurricanes, further in advance,” Gunderson said. “We also have better information about potential flooding and wildfire events. This enhanced data and more precise modeling translates into better analytics and thus a better borrower experience.”
She added that data can also teach lessons, saying that insurance industry loss data currently specifies many properties that are underinsured and lacking coverage to rebuild in the event of a natural disaster.