As Seas Rise, Coastal Commercial Properties Will Need to Batten Down the Hatches

CMBS, Insurance Organizations


Sea levels are rising across the globe, which, along with an increase in severe storms, has resulted in severe flooding and other damaging weather-related events. Commercial real estate located in these high risk areas is particularly vulnerable, and the value of these properties stands to be negatively affected as these trends continue. Although individual property owners can take steps to mitigate these trends, coordinated community level intervention with infrastructure improvements is also necessary. Commercial mortgage-backed securities issuers and credit rating agencies are exploring the effects of rising sea levels on their portfolios. DBRS Morningstar will continue to monitor the impact of rising sea levels and the exposure to flood risk of the commercial real estate transactions we rate.