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Storm Impact

The storms are going to have huge impacts on CRE in Florida and Houston, but the economy as a whole will get through this and then Q4 will actually…

By Joel Ross | joelross | Updated on September 11, 2017

Joel Ross

The storms are going to have huge impacts on CRE in Florida and Houston, but the economy as a whole will get through this and then Q4 will actually be up based on all the rebuilding. Q3 was on track for another 3% GDP growth, so the impact of the storms will not crush it. Katrina, which was the most expensive, was only .86% of GDP. Harvey will hit Q3 GDP by only .3% and Irma maybe .5% so we should still see better than 2% GDP in Q3 and Q4 may be slightly up due to all the expenditure for rebuilding and all the government spend. Houston will very likely come back faster than Florida since it is just flooding and most CRE of substantial size is high rise. So long as power is restored to buildings then office and shopping centers should be able to be back open and operating fairly soon.  Florida will be different.

It appears Miami and Ft Lauderdale will not sustain the level of damage first expected, so commercial properties in those locations, which are newer and built to withstand these storms, should be Ok and back in operation quickly. The real damage will be on the west coast where the condos, and single family homes are. The resorts and golf communities will sustain far more damage from the surges, and places like Naples and up the coast will be far more impacted. The hotel businesses in these area up to the panhandle will suffer very badly especially on Marco Island, Anna Marie, Longboat Key and the other barrier island areas.

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