Climate Impact on Investment – Marc Gordon interviewed
Woodland Hills, CA— June 16, 2023— The impacts of climate change on different regions of the United States were recently analyzed by CoreLogic, shedding light on the areas most at risk over the next 30 years.
The Southwest and Rocky Mountain West are considered the least risky regions, despite wildfires and water scarcity, while low-lying areas like Louisiana and Florida face the highest risk from hurricanes and flooding. These data sets are increasingly being used by multifamily investors to inform their decision-making, as they seek to avoid property damage and secure affordable insurance.
The report suggests that as climate change worsens, people will gravitate towards safer areas, leading to climate migration and creating challenges for real estate investors. The study also highlights the role of insurers in influencing investment decisions, with insurance giants like State Farm and Allstate avoiding high-risk areas and increasing premiums in vulnerable regions.
As a result, apartment investors are turning to third-party climate risk modeling and data analytic companies to assess the vulnerabilities of assets and make informed investment choices. Investors Management Group co-President and Chief Financial Officer Marc Gordon spoke with Bisnow on the impacts of climate risk on multifamily acquisition decisions. “Weather patterns such as increased hurricane and tornado activity do influence our decision to enter — or shy away from — particular markets. Our decision to stay out of a market typically has more to do with the risk of not being adequately insured.”
Founded by Neil Schimmel, Investors Management Group, Inc. (“IMG”) is an award-winning real estate sponsor and asset manager focused on multifamily assets across a national platform. IMG specializes in improving and managing apartment communities to enhance the resident living experience and maximize value for investors. The firm has transacted over 12,000 apartment units ($1.6 billion) nationally since 2010.