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Climate change may impact properties with commercial leases

| Apr 11, 2019 | Commercial Leases

For investors in Los Angeles and elsewhere, measuring risk against opportunity is paramount. In the real estate market, investors are especially concerned with the increased risk they face due to climate change, as natural disasters cost damages totaling over $300 billion in 2017 — a record. For this reason, investors who are interested in buying properties featuring commercial leases may want to more aggressively calculate climate risk as well as its potential effect on their property portfolios.

Large real estate companies have already poured resources into making these calculations to determine how rising sea levels and frequently occurring extreme weather are impacting their portfolios. Failure to do this may cause investors to be unprepared for the worst. Meanwhile, those who are proactive may put themselves in the best position to outperform their competition.

To protect themselves against the effects of climate change, real estate investors may want to incorporate extra mitigation measures and physical adaptation for their at-risk assets. They can also engage with their policymakers on resilience strategies that can be executed in their local areas. In addition, it might be beneficial for them to strive to diversify their portfolios as they engage in buying and selling.

Purchasing or selling California properties featuring commercial leases is exhilarating. At the same time, these transactions can come with many challenges, especially legal ones. Fortunately, a real estate law attorney in Los Angeles can guide investors through their deals to make sure that their legal rights are preserved at every stage of the process.