The Big One certainly hit Japan—a double whammy ultra powerful earthquake followed by humongous tidal waves. Everyone in the U.S. wrings their hands over the possibility of a similar situation here—red flags go up in the face of recently reviving plans to expand nuclear power. The relatively good news in Japan is that Greater Tokyo and other major urban population centers were spared direct hits from earthquake damage. It’s bad enough that probably 20,000 lives were lost, but it could have been much worse given the off the charts size of the quake.
Of course, the U.S. West Coast has been warned to anticipate a quake of exceptional proportions for decades. In my lifetime, Seattle and Alaska have had major quakes, SF suffered through the World Series earthquake in 1989 and LA had a sizeable shaker back in 1994. But none qualified as a really Big One. And as we’re reminded by other recent incidents in New Zealand and Chile, not only does size matter, but also where the trembler strikes and at what depth below the surface. The Christchurch quake in New Zealand was much less intense than Japan’s, but it hit close to the city center with devastating impact to downtown.
It’s really all a roll of the dice—some of our most important real estate markets and business centers sit along major fault lines on the Pacific Coast, and three of our country’s most strategic ports (LA Long Beach, San Francisco/Oakland and Seattle/Tacoma) lie in potential harm’s way. If an 8 or 9 strikes in the wrong place, Katrina will look like a minor incident by comparison.
Now intellectually, we all know something really bad could happen. If even a 6 plus quake hits near the crumbling levees in the Delta region around Sacramento, experts warn much of California’s water supply could be severely compromised for months or longer. Who knows what would happen if a tidal wave hit the Long Beach port or the Big One centered near a major population center. It wouldn’t be pretty.
Very few investors pay much attention to earthquake issues—well they’ll make sure buildings meet code and give lip service to having the right insurance policies in place. But most of us assume, we’ll side step ultra catastrophe. Indeed California is our most populous state and most folks shopping Florida’s battered real estate markets are more worried about another pricing decline than the next hurricane. It’s ironic that some of our most expensive real estate is located in some of the most parlous locations.
I own a house on a barrier island off Long Island several hundred yards from the ocean. If the fated 100-year storm comes, the home is done for. I don’t think much about the Big One and treasure the ocean view. But that doesn’t mean a Category 4 or 5 storm couldn’t blow through this summer or next… Like most everyone else I’m not paying much attention…Although if I’m Jerry Brown I’d be finding bucks to fix those California levees pronto.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
