Disasters are increasing in intensity, frequency and cost, according to the National Oceanic and Atmospheric Administration (NOAA)’s database of billion-dollar disasters.
And even if your building isn’t severely impacted by a flood, wildfire or tornado in the short term, real estate that exists in a warmer, wetter world sustains more gradual impacts that will affect your bottom line, from increased wear and tear on the building itself requiring extra maintenance to increased operating costs from having to run air conditioning more frequently. Retrofitting equipment to keep up with these trends comes at a cost too.
Fortunately, design and operations strategies can improve an asset’s resilience to physical hazards, reduce disruption and potentially result in lower insurance premiums for you. Resilience is good for your bottom line, from your continued insurability to your marketability to tenants. A panel at the 2024 BOMA International Conference & Expo moderated by Lindsay Brugger, vice president of resilience for the Urban Land Institute, explored how to know what resilience strategies to prioritize.
Why Implement Resilience Strategies?
There are many factors that drive an organization’s decision of whether or not to retrofit a piece of equipment or fortify a roof in the name of resilience. Panelist Kelly Vickers, vice president of ESG for Mill Creek Residential Trust, described a five-part investment analysis her company uses as a developer:
- Physical climate risk reports, such as Moody’s Climate on Demand, that assess your asset’s physical risk
- FEMA flood zone scores
- Traditional insurance data and catastrophe modeling
- Environmental impact and geotechnical reports
- Requirements from different funds and partners
As it put together its resilience strategy, Mill Creek Residential Trust discovered that there were many resources available to help property teams make buildings more resilient, but it was difficult to tie them all together. The company partnered with the Urban Land Institute last year to put together the Developing Resilience Toolkit, a two-part distillation of years of insight and scores of resources. First, assess your hazards with the PDF document, then use the filterable Risk Reduction Matrix spreadsheet to uncover more than 140 risk mitigation strategies that could work for your building.
The Developing Resilience report recommends a five-step process to implement resilience strategies, Vickers said:
- Understand hazards and exposure
- Assess vulnerability and risk
- Investigate risk reduction strategies
- Prioritize and plan implementation
- Implement and refine
3 Tips for Improving Building Resilience
JBG Smith, a REIT based in the Washington, D.C. area, did its first climate risk assessment in 2019 and discovered that its three highest-risk areas were coastal and fluvial flooding, temperature extremes (particularly heat stress) and regulatory and policy changes. Washington, D.C. was one of the first cities to enact a building performance standard, and not complying with a BPS law usually results in fines and fees.
The company looked for tactical strategies it could implement, explained Kim Pexton, LEED Fellow and JBG Smith’s vice president of sustainability. It piloted innovative products, including CoolSeal (a sealant for flat surfaces that cuts down on the heat island effect) and Nano Tint (a liquid-applied window film that blocks UV). It also learned several lessons along the way, including:
1. Find a trusted partner to develop asset-level resilience plans. The people who conduct climate risk assessments aren’t always the people who help property professionals choose mitigation strategies.
2. This is a team effort. “Your engineering team, your building operations and your property managers should be front and center as you’re developing these mitigation strategies,” Pexton said. “They have a lot of history and knowledge from being the boots on the ground and seeing the challenges of how difficult something might be to implement.”
3. Listen to your insurance provider. “The feedback we’ve gotten from our insurance providers is that our reality is that we won’t necessarily realize insurance premium reductions,” Pexton explained. “It really is going to become a matter of, you have to have mitigation strategies and a plan to address your physical hazards, or else risk not having insurance at all. That’s something we all need to keep in mind.”
