Whether they invest in areas known to be primed for natural disasters like hurricanes and wildfires or in supposedly safer parts of the country, CRE investors can expect insurance rates to keep growing to the point where they represent substantial challenges, according to John Yang, senior vice president, research services, at Marcus & Millichap.

"The insurance model is built on the spreading and diversification of risk," Yang said in a video presentation. "So even though California and Florida have more risk and insurance rates there have gone up considerably, the cost will be spread among the entire portfolio of the insured. Pretty much everyone's rates will go up. For CRE investors, the insurance challenges are substantial and it makes underwriting deals more difficult."

Yang warned that the rising costs of insurance against natural disasters will have an impact since insurance is generally about eight to 10 percent of total costs. And the frequency of major natural disasters is increasing, along with their cost.