Translating Climate Risk Data into Actionable Building Intelligence

In this episode of the REIT Report special series, “Building Resilience,” Holly Neber, chief resilience officer at AEI Consultants, discusses her experience leading a group of over 180 industry experts, who all came together to establish the ASTM Property Resilience Assessment, a consensus-based standard for physical risk as part of due diligence and capital planning.

In this special episode of the REIT Report, part of an ongoing series, “Building Resilience,” covering issues facing the REIT industry as it remains focused on investing for the long term, Holly Neber, chief resilience officer at AEI Consultants joins Nareit’s Jessica Long, senior vice president of environmental stewardship and sustainability, to discuss turning climate data into action at the property level using industry leading best practices captured in the new ASTM standard, Property Resilience Assessment. 

What’s the property worth? What are the potential hazards, the risks?

“The ASTM guide was never meant to be something extra or something brand new, but really a roadmap consistent with what firms were already doing to provide an industry-accepted standard so we can all refer back to it. So all the parties agree on a common approach to communicating the findings.” She goes on to explain the three parts of the assessment, including identifying property-specific exposure to identified risks, to estimate potential damage and downtime of identified risk exposure, and, if necessary, develop specific recommendations to address concerns. 

“We’re seeing this information being used in negotiations. A buyer might say, hey, we love this property, but based on our PRA, we’re going to need to invest a million dollars in flood prevention upgrades. So we’re going to have to factor that into the purchase price,” Neber says. “It’s becoming a really powerful tool for risk assessment and price negotiation. I think within the portfolio context, people are also using this information to make acquisition and disposition decisions and to inform capital planning.”

The process for translating climate risk data into actionable building intelligence supports building owners to make informed decisions and align resilience investments with the building’s overall capital plan. “There are a lot of buildings that look really bad on the stage one report that aren’t actually in a bad situation, and additional dollars just for resilience might not need to be spent. It could be that you’re just going to spend those roof replacement dollars more wisely. It’s really just about how you’re maintaining those buildings and making good decisions,” Neber says.