Rising Sea Levels Pose Risk to Institutional Real Estate Investment

The results indicate that large swaths of real estate value lie in areas at high risk of being affected by sea-level rise. More than 24 percent of the NPI value is in metro areas whose central cities are among the 10 percent of cities most exposed to sea-level rise. This amounts to more than $130 billion of real estate. And a whopping 67 percent of the NPI’s value, or $360 billion, is in metro areas whose primary cities are among the 20 percent most exposed in the United States

“Gateway markets”—the largest global cities, including New York City and the San Francisco Bay area in the United States—represent a large share of total investment and carry a heavy weight in institutional real estate portfolios. They are characterized by concentrations of service industries such as finance, law, consulting, media, and design. They also are key transport nodes, possessing hub airports with global links. Almost all are coastal cities, with their business districts close to sea level. This is no accident. The economic primacy of gateway markets, in most cases, was forged through historical flows of ocean-borne trade, information, and migration. Indeed, to this day the presence of a major seaport helps drive the dominance of many gateway markets. Read full article . . .