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Shaking Up Common Perceptions about Earthquake Risk

Understanding Building Stability, in addition to scenario loss estimates, can provide a more accurate picture of seismic risk exposure.

By Jason Coray, PE, SE | November 26, 2024 at 04:45 AM

Lenders, investors, and insurers have become increasingly concerned with building resilience, including resilience to seismic events. While many commercial real estate (CRE) professionals are familiar with Seismic Risk Assessment (SRA) reports, another metric, Building Stability, can impact underwriting decisions as well. With every damaging earthquake and new mandatory retrofit ordinance, policies are increasingly being updated to include Building Stability. Many financial institutions, particularly Fannie Mae and Freddie Mac lenders, will not finance properties that do not meet Building Stability requirements. By understanding both criteria, CRE players can more accurately gage their risk exposure in relation to seismic events.

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