In the context of global climate change, resilience in commercial real estate has become a top priority for investors and developers.
With extreme weather events such as hurricanes, tornadoes, earthquakes, wildfires, floods, and temperature extremes growing in both frequency and intensity, ensuring that buildings retain their commercial value and remain operational during natural disasters has become a pressing concern.
Building scientists, architects, and engineers are now adopting innovative design practices and advanced technologies to ensure these high-value real estate assets can endure nature’s growing challenges.
As the climate crisis worsens, real estate investors and operators are increasingly recognizing that building resilience is no longer just about mitigating disaster risk—it’s essential for preserving long-term asset value and ensuring business continuity.
Developers and enterprises alike must address critical questions: how to plan, retrofit, and deploy new technologies to keep buildings functional amidst natural disasters.
A comprehensive climate risk assessment is now indispensable for every real estate investor. This goes beyond predicting the likelihood of disasters in a given location; it must also consider how the building is used and what the specific business needs are.
As Stet Sanborn, Vice President and Director of Climate Impact at San Francisco–based architecture and planning firm SmithGroup, explains: “Every building owner or investor needs to begin with a risk assessment that identifies the five or six top risks that could potentially affect them.”
Firms like ATTOM Data Solutions, First Street, and Cotality (formerly CoreLogic) leverage big data analytics to offer site-specific risk assessments, providing actionable insights into exposure to fire, wind, flood, and extreme heat or cold. These insights help businesses better understand potential impacts on operations and investment returns.
According to the National Oceanic and Atmospheric Administration (NOAA), weather-related disasters have caused nearly $3 trillion in damages across the U.S. over the past four decades. This staggering figure highlights the escalating threat climate change poses to commercial real estate.
Traditional design standards are no longer sufficient to cope with these intensified climate hazards. In response, developers are increasingly turning to science-based, forward-looking construction methods to future-proof their assets.
Location selection is one of the most critical factors in commercial real estate planning. As extreme weather becomes more frequent, many companies are re-evaluating where they place their facilities.
While some are relocating to less disaster-prone regions, industries reliant on data centers or advanced manufacturing often can't afford to make climate risk the sole determinant. As Jim Hazard, Managing Principal at global CRE advisory firm Cresa, puts it, “For most companies, climate risk is just one factor among many when it comes to site selection.”
Nevertheless, climate change is forcing architects to rethink design strategies—especially in high-risk regions. Take the Brock Environmental Center in Virginia Beach, Virginia, for example. Widely considered one of the world’s most resilient and sustainable buildings, it’s engineered to withstand 130-mph winds, storm surges, and flooding.
Elevated 14 feet above sea level on concrete columns and footings, it exceeds FEMA’s projections for both 500-year flood levels and sea-level rise. Its aerodynamic roof and resilient materials boost wind and water resistance, while its net-zero energy, water, and waste systems make it a community resource during emergencies.
For certain facilities, resilience design is significantly more complex. At Cape Cod Hospital in Hyannis, Massachusetts, the newly constructed cancer center and patient tower were specifically designed to address sea-level rise, hurricane storm surges, and high-velocity projectiles.
Emergency generators were positioned above projected flood levels, and the entire site was elevated to keep the first floor above the 500-year floodplain.
Beyond disaster resistance, commercial resilience strategies also account for energy efficiency and occupant well-being. More warehouses and office buildings now incorporate air conditioning systems to mitigate extreme heat. High-performance insulation, cool or white roofs, green roofs, geothermal HVAC, and solar panels with battery storage are increasingly standard.
These technologies not only reduce energy consumption but also enhance comfort. For instance, white roofs help reflect sunlight and lower internal temperatures—directly improving operational efficiency and employee satisfaction.
In seismically active regions, earthquake-resilient design is essential. “The building process is all about mitigating the forces of nature—from seismic activity to fire, water, and sunlight,” says Zoltan Pali, founder and principal at Los Angeles-based architecture firm SPF:a.
One example is WE3 at Water’s Edge in Los Angeles—a four-story office development designed to withstand sea-level rise and changes in the water table, while also being reinforced against seismic activity.
Innovative materials are also transforming how we build. The RSG 3-D structural insulated panel system, for example, has been used in over 20 countries for more than three decades without suffering damage from hurricanes, wildfires, earthquakes, or typhoons.
This system combines insulated foam panels with a steel truss framework to create a structure that is lighter than concrete yet stronger, fire- and flood-resistant, and capable of distributing stress from wind or seismic forces. Its track record makes it a powerful tool for risk mitigation.
Despite the benefits, cost remains a major obstacle. Developers and investors widely recognize the value of resilient design in preserving long-term asset value—but balancing upfront construction and retrofit costs with expected returns remains difficult.
Insurance costs add another layer of complexity. In California, earthquake insurance premiums have surged by over 350% in recent years. Although some resilient buildings may eventually qualify for lower premiums, insurance providers have yet to standardize such incentives across the industry.
Approximately 80% of commercial buildings are existing structures, which means retrofitting will be necessary in most cases. “Most building owners recognize that investing in resilience is necessary to maintain the long-term value of their property,” says Sanborn.
Still, retrofits can be complicated—especially for facilities like hospitals that operate 24/7, compared to university buildings that may be unoccupied during summer months.
Some upgrades, however, are relatively low-cost yet impactful. For example, sealing air leaks to protect indoor air quality during wildfire events can be done in hours, while installing specialized air filtration systems can significantly improve safety and comfort.
Even modest improvements—like replacing windows with wind- and impact-resistant alternatives—can deliver major gains in both safety and energy efficiency. Structural reinforcements using carbon fiber sheeting that bonds to existing concrete can also add seismic resilience with minimal disruption, as noted by Pali.
For developers, cost-efficiency is a constant concern—especially when trying to attract tenants while investing in long-term resilience. One solution lies in designing for flexibility. As Sanborn explains, “Flexibility in design allows owners to make incremental improvements over time, helping to spread out the financial burden of retrofitting.”
Insurance costs also remain a critical consideration in disaster-prone areas. Steve Bellitti, Senior EVP for logistics at Colliers, notes, “The biggest concern for institutional owners, particularly in Southern California, is the rising cost of earthquake insurance.”
While evidence directly linking resilience upgrades to reduced premiums is still limited, insurers are beginning to take notice and may eventually offer lower rates to properties with verified protective features.
Whether through new construction or strategic retrofitting, resilience is becoming a cornerstone of modern commercial real estate development. For investors, the key challenge is balancing financial constraints with the urgent need to ensure long-term viability and operational continuity.
As climate risks escalate, building resilient real estate will be essential—not only for protecting assets, but also for sustaining business, serving communities, and navigating the unpredictable decades ahead.