Evaluating Climate Risk: What the Data Tells you and What It Does Not

Institutional Real Estate (2024) | Underwriting, Financing, Capital Stack

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In this insightful interview, Julie Manning and Elena Alschuler of LaSalle Investment Management discuss how climate-risk data is increasingly shaping real estate investment strategies. This data is progressively being employed by investors as a directional tool to assess exposure to hazards such as floods and hurricanes, though it is acknowledged that the data is lacking in precision.

LaSalle’s methodology integrates scenario modelling and asset-level analysis to evaluate building resilience, factoring in local mitigation efforts and usage. A significant challenge is posed by the absence of standardized metrics and terminology across data providers, which complicates the process of comparison. The role of regional differences in risk and regulation is also critical. It is equally important to integrate climate-related migration into analytical frameworks, especially given the contin…