“etter environmental assessment tools will help ... 22nd...help commercial real estate and lenders...
TRANSCRIPT
“Better Environmental Assessment Tools Will Help Commercial Real Estate and Lenders Cope
with Increasing Weather and Climate Risk” By
Albert J. Slap, President and Co-Founder of Coastal Risk Consulting, LLC
May 22, 2020
Better Environmental Assessment Tools Will Help Commercial Real Estate and Lenders Cope with Increasing Weather and Climate Risk –
Sponsored by NJAFM and Presented by Albert J. Slap
Continuing Education Compliance StatementThis course is being offered as CPC credits to Certified Floodplain Managersand New Jersey Professional Engineers. To be compliant, certain proceduresand record keeping are required by NJAFM.
If you will be claiming the CPC credit, you must register your attendance on theNJAFM website and return the training evaluation form. Upon receipt of thetraining evaluation form, NJAFM will email you a certificate indicating thenumber of credit hours received for this instruction. A copy of the attendancerecord will be kept on file with these course credits.
CPC credits are issued based upon the time of instruction. 50 minutes ofinstruction content equals 1 CPC credit. This course is scheduled to begin at12:00 NOON and conclude no earlier than 1:00pm thus providing 1 CPC credit.
PLEASE NOTE THAT THIS ON-LINE PRESENTATION IS BEING RECORDED ANDWILL BECOME THE PROPERTY OF NJAFM. IF YOU AS A PARTICIPANT DO NOTDESIRE TO BE RECORDED, PLEASE DISCONTINUE FROM THE PRESENTATION.YOUR CONTINUED PARTICIPATION IN THIS EVENT PROVIDES YOUR INDIVIDUALAUTHORIZATION TO NJAFM THAT YOU ACKNOWLEDGE AND CONSENT TO THERECORDING OF THIS PRESENTATION AND CONTINUED USE BY NJAFM.
Speaker Biography
Speaker: Albert J. Slap, President, Coastal Risk Consulting, LLC
Office: 844-Sea-Rise (732-7473)
Website: www.floodscores.com
Email: [email protected]
Presenter profile
Albert J. Slap is President and Co-Founder of Coastal Risk Consulting, LLC, a geospatial technology, modeling and data analytics company located in Boca Raton, FL. Coastal Risk’s technology empowers individuals, businesses and governments in the US and globally to accelerate resilience to floods, natural hazards and climate impacts. Coastal Risk provides the robust tools needed for informed, resilience decision-making, today, and decades into the future. Prior to launching Coastal Risk, Mr. Slap was a nationally recognized, environmental trial attorney and law professor. Over the years, Mr. Slap used America’s environmental laws and its legal system to protect public health and the environment by stopping water and air pollution, toxic waste dumping, and by requiring local governments to replace aging and polluting sewer infrastructure. His Clean Water Act citizen suits delivered cleaner rivers and streams and brought billions of dollars of re-investment in municipal wastewater treatment plants, thereby creating tens of thousands of new construction jobs. Mr. Slap has authored numerous legal articles and book chapters on environmental issues and has been an invited speaker at dozens of legal, environmental, insurance, and commercial real estate conferences. He has served as a Board Member of The Nature Conservancy’s Pennsylvania Chapter, Director of The Nature Conservancy’s Colorado River Program and a member of The Nature Conservancy’s Caribbean Advisory Board (www.nature.org). Mr. Slap was also was a Board Member and General Counsel of Friends of the Everglades. For his outstanding legal work, Mr. Slap was the recipient in 2014 of the prestigious Marjory Stoneman Douglas “Defender of the Everglades Award
“What’s Past is Prologue,” William Shakespeare
• Over the past 40-years, the number of natural disasters causing financial losses in excess of $1 billion has risen steadily.
• Since 1980, the U.S. has sustained 258 weather and climate disasters exceeding $1 billion.
• The cumulative cost for these events exceeds $1.75 trillion. https://www.climate.gov/news-features/blogs/beyond-data/2010-2019-landmark-decade-us-billion-dollar-weather-and-climate.
• During 2019, the U.S. was impacted by 14 separate billion-dollar plus disasters, including: 3 major inland floods, 8 severe storms, 2 tropical cyclones (Dorian and Imelda), and 1 wildfire event.
• 2019 marks the fifth consecutive year (2015-19) in which 10 or more billion-dollar plus disaster events have impacted the U.S.
The State of Due Diligence
•Physical risks from extreme weather events, natural hazards and climate change (e.g., floods, fires, extreme heat, extreme rainfall) remain largely unaccounted for in commercial real estate and loan underwriting.
•Without better knowledge of the risks, the average commercial real estate investor or lender can only hope that the next extreme event won't trigger a sudden correction.
More Diligence is Due!
• Lenders and borrowers typically and sometimes exclusively rely on FEMA flood maps, Phase I audits and Property Condition Assessments (PCAs) to make investment and underwriting decisions;
• These Assessments are not sufficient for accurate property valuations and underwriting.
• This can lead to mis-pricing of assets, loan defaults and restructuring debt.
“Non-ASTM” Gaps
• The “gaps” include:
•Granular analyses of:• Flood inundation depths from all relevant sources•Natural hazards, including: wind, tornados, wildfire,
earthquakes, tsunamis•Climate change impacts such as: future extreme heat, future
extreme precipitation• “Costs of doing nothing” • Increased energy costs due to extreme heat• Increased property maintenance due to extreme
precipitation
FEMA/NFIP System Gaps
• FEMA maps don’t include heavy rainfall flood risks
• FEMA maps don’t include NOAA Storm Surge Models
• FEMA maps don’t include sea level rise
• FEMA riverine flood maps don’t have full US coverage
• FEMA riverine flood maps are out of date in places
What’s a FEMA X Zone?
Homes/Businesses at FEMA X-zone risk of flooding?
• https://blog.nature.org/science/2018/02/28/new-study-shows-flood-risks-across-the-u-s-are-underestimated-in-a-big-way/
• https://iopscience.iop.org/article/10.1088/1748-9326/aaac65
2018 satellite flood map study of US by Bristol Univ. and The Nature Conservancy:• 40.8 million people (13.3% of the population) are currently exposed to
a 1 in 100 year (1% annual exceedance probability) fluvial or pluvial flood
• GDP exposure of $2.9 trillion (15.3% of total GDP). • FEMA flood maps indicate 13.0 million people are exposed. • This analysis indicates that previous estimates capture roughly one-
third of the exposure.
Consequences of FEMA Gaps
Hurricane Harvey Example:
• Hurricane Harvey damaged more than 204,000 homes and apartment buildings in Harris County, almost three-quarters of them outside the federally regulated 100-year flood plain, leaving tens of thousands of homeowners uninsured and unprepared.
• More than 55 percent of the homes damaged during the Tax Day storm in 2016 sat outside the 500-year flood plain, as did more than one-third of those during the Memorial Day floods in 2015.
https://www.houstonchronicle.com/news/article/In-Harvey-s-deluge-most-damaged-homes-were-12794820.php
Coastal Risk Heavy Rainfall Model
Hurricane Harvey actual flooding, Kingwood, TX
Hurricane Harvey Heavy Rainfall Flooding
Mexico Beach – Category 5 Hurricane Michael Impact
$5 Billion in Property Damage(higher including uninsured losses)
Hurricane Michael Storm Surge Flooding
Coastal Risk modeling Actual storm surge impacts
Offut Airbase, Nebraska 2019
Mola Avenue, Fort Lauderdale, King Tides
Coastal Risk Tide Flood Model Actual King Tide Flooding
hat
Portfolio Risk Screening
Property-Level Flood Risk
Assessment
Loss Calculations
Risk Mitigation Cost Estimation
Recommend Solutions
What’s New? B-Resilient™: A 5-Step Process to
Accelerate Resilience
Automated Risk Assessment Tools
• Coastal Risk’s automated tools allow lenders, property owners and investors to identify properties that are particularly vulnerable to risks;
• This enables resources to be focused on vulnerable sites for further risk assessments or management.
• Accelerating climate resilience through asset-level risk assessment insights | AWS Government, Education, & Nonprofits Blog
• https://aws.amazon.com/blogs/publicsector/accelerating-climate-resilience-asset-level-risk-assessment-insights/
Portfolio Risk Scoring – Focus on “Red Zone” Properties
Effective Communication of Risk Visualizing Property Flood Risks
Extreme Weather-relatedImpacts
King tide / Sea level riseflooding
Base Flood Elev.= FEMA 100-year Flood Plain
All other elevations calculated by Coastal Risk’s modelingCategory 3 High Tide
(4.4 ft. Elevation NAVD 88)
Base Flood Elevation(6.44 ft. Elevation NAVD 88)
1 ft. AboveBase Flood Elevation(7.44 ft. Elevation NAVD 88)
Category 2 High Tide(4 ft. Elevation NAVD 88)
Category 1 High Tide(3 ft. Elevation NAVD 88)
Category 4 High Tide(6.6 ft. Elevation NAVD 88)
Category 5 High Tide(8.6 ft. Elevation NAVD 88)
King Tide 2045(2.74 ft. Elevation NAVD 88) King Tide 2016
(1.66 ft. Elevation NAVD 88)
King Tide 2030(2.12 ft. Elevation NAVD 88)Indian Creek (80 ft.)
“Cost of Doing Nothing”
Which Flood Defense Systems are Cost-Effective at Your Property?
• Personalized resilience-accelerating advice for individuals, businesses and governments
22
Why Add Future Climate Risks to Due Diligence?
23
Climate Impact Modeling Can Save Big Bucks!Recommendations
• NEW CHILLERS
• The central plant and tower system systems total 4,300 tons, the estimated capital cost to improve efficiency is $2.15 million.
• Assuming a 20% increase in efficiency and an end of life for the original chillers at 2030 we see average annual savings of $350,000 starting in 2031.
Total Savings in Cooling Cost (2020 to 2049)
System Median Model High Model
Central Plant $ 4,268,000 $ 4,708,000
Tower Plant $ 1,644,000 $ 1,803,000
Pool Club Plant - -
Total $ 5,912,000 $ 6,511,000
What Should Commercial Real Estate and Lenders Do?
• Utilize new cloud-based tools to better understand flood, natural hazard and climate risks at purchase/opportunity and mortgage origination stages;
• Identify flood, natural hazards and climate risks in real estate and mortgage portfolios;
• Consider making resilience-enhancing investments in properties with high risks where there is good ROI.
For Further Information Contact:
Albert J. Slap, President and [email protected]
Rajiv Krishnan, [email protected]
Dr. Leonard Berry, Vice President and [email protected]
COASTAL RISK CONSULTING, LLC(O) 844-SEA-RISE (732-7473)
COURSE EVALUATION
Better Environmental Assessment Tools Will Help Commercial Real Estate and Lenders Cope with
Increasing Weather and Climate Risk – Sponsored by NJAFM and Presented by Albert Slap
As a reminder, to claim the CPC credit, you must registeryour attendance on the NJAFM website and return thetraining evaluation form or email indicating you are self-certifying your participation. NJAFM will email you acertificate indicating the number of credit hours received forthis instruction. A copy of the attendance record will be kepton file with these course credits.
