Flooding is an ugly and devastating way of seeing property value wiped away. According to the Federal Emergency Management Agency's standard warning, an inch of standing water in a single-story 1,000 square foot home can cause $11,000 of damage.
But the potential for damage to commercial buildings is just as grave, if not more so. For example, a 2017 study out of the University of Nebraska at Omaha showed that "[c]ommercial buildings represent 13% of all structures in the 100-year floodplain in Sarpy County (Omaha, NE) and 16% in Fargo/Moorhead (ND and MN), yet account for half of total potential flood damage exposure as represented by depreciated structural replacement values (DSRVs)."
Both having and understanding flood insurance is critical to CRE property management. Some recently changed plans and practices require businesses and investors to reevaluate where they stand.
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