The increase in fire activity throughout California is having a major impact on the residential market. The blazes, which have destroyed whole communities in the last year, have fueled significant insurance rate increases to the tune of 300% in high-risk areas. In other cases, insurance companies have pulled out of markets completely. While this is having a huge impact in the residential world, commercial owners aren't concerned. Why? Commercial assets tend to be built down in a flat land area, away from hillsides and brush, making them less susceptible to fire damage and rate increases.

"There doesn't tend to be a lot of retail in these markets. I can count on one hand the retail and commercial properties that are in high impact areas," Steve Bram, co-founder and principal at George Smith Partners, tells GlobeSt.com. "Usually, retail properties are down in the flatlands and homes are built in the hills. So, fires and insurance increases are not going to have as big of an impact on retail properties. Insurance isn't increasing at all in the flatlands, but there is a terrible impact in the hills."

In fact, Bram notes that in recent deals at the firm, fire risk hasn't been an issue for lenders, even in markets where fires have roared. "One of my brokers just did a loan on a hotel in Malibu after the fires, and he was able to get that insured with a great quote," he says.