Harvey’s wrath: $55B worth of Houston commercial real estate may be under water
About 12,000 properties and 400M sf are in the 500-year floodplain
As much as 27 percent of Houston’s commercial real estate may be impacted by flooding in the wake of Hurricane Harvey, according to a CoStar analysis of flood maps.
The 12,000 potentially affected properties span 433 million square feet and have a combined value of $55 billion, the real estate data company said. They include 167,281 apartments, 73 million square feet of retail space, 60 million square feet of office space and 11 hospitals.
The most heavily flooded part of the city, Southwest Houston, includes 66,000 apartments. CoStar estimates that 30 percent may be impacted by the flood.
In a press release Thursday, Howard Hughes Corporation, which owns more than 4 million square feet of real estate in the Houston area, said its properties are “fully operational and open with only minor damage.”
Risk modeling company RMS previously estimated that Harvey could cause up to $90 billion in damage across the southeastern U.S.
Earlier today the New York Times reported that the fast pace of real estate development in Houston — which was founded by real estate entrepreneurs from New York — over the past decades likely worsened the storm’s damage because it leaves fewer areas for floodwaters to recede to. “There could have been ways to have more green space and more green infrastructure over the years, and it just didn’t work that way, because it was fast and furious,” Rice University civil and environmental engineer Phil Bedient told the Times. “It’s been known for years how to do it, it just costs the developers more money to do it that way.”
The aftereffects of the last hurricane/superstorm to devastate a U.S. metropolis, Sandy, cost New York property owners and their insurers an estimated $8.6 billion in damage. But as The Real Deal reported in November, the industry has been slow to learn its lessons and prepare for future natural disasters.