Insight

Increased Flood Risk in Southeastern Louisiana: Consequences and Opportunities

Increased Flood Risk in Southeastern Louisiana: Consequences and Opportunities

Robert M. "Rob" Steeg

Robert M. "Rob" Steeg

April 11, 2022 02:32 PM

A new study by the engineering firm Arup and the non-profit First Street Foundation contains important predictions about flooding that are of particular importance to real estate development in Southeastern Louisiana.

The study predicts that flooding due to climate change will increase dramatically over the next 30 years, and it puts some startling dollar amounts on the impact of this increase. Damage to businesses, stores and apartments are expected to increase 25% over the next 30 years, reaching nearly $17 billion per year by 2052. Perhaps more significantly, the study predicts that stores will close, offices will furlough workers, and families will be forced to relocate. The financial impacts of these changes are estimated to reach $63 billion by 2052, and the number of lost business days is expected to rise from 3,100,000 days per year in 2022 to 4,000,000 days per year in 2052.

About 8% of existing commercial buildings that are currently not at risk will be considered “dangerous investments” by 2052, according to the report. Closer to home, the report predicts that the New Orleans area faces 3 to 9 times the economic damages from flood-closed commercial real estate in 2052 as the national average.

Unfortunately, according to the study, Louisiana is projected to have the heaviest adverse impacts of the increasing flood risk in all of the continental United States, with economic damages increasing 190% over the next 30 years.

The increasing flood risk in Southeastern Louisiana is not surprising news to property owners and developers in this area. However, the dollar figures attached to these risks, and the increasing severity of the risks, warrants serious attention, in such diverse areas as:

  • Elevation heights of new developments;
  • Construction techniques to attempt to prevent or mitigate damage from flooding;
  • Possible purchase of the maximum amount of flood insurance, when available;
  • Economic strain on the National Flood Insurance program, and possible private insurance options that might become available in the commercial marketplace; and
  • More direct attention paid to flooding consequences in lease documents between landlords and tenants.

In addition, as smaller property owners, or those with less appetite for risk, exit the market because of more frequent flooding events, there may also be significant opportunity for purchasers to acquire properties at depressed prices.

Related Articles

4 Essential Steps for Commercial Real Estate Due Diligence


by Best Lawyers

Due diligence in real estate is essential for all parties. Best Lawyers walks through the key steps of effective due diligence in commercial real estate.

Animated magnify glass in front of building and checklist

Big Updates in the Big Apple


by Nina M. Roket and Thomas D. Kearns

A Post-COVID-19 update on the commercial market for landlords, building investors and retail developers in New York.

Abstract skyscrapers and buildings in multi-color

Under Pressure


by Antonios Roustopoulos and Sara T. Wagner

Capital markets commercial real estate is under pressure, and creativity is needed to make deals in 2023.

Two corporate employees standing near window with cityscape

The Commercial Conundrum


by Brion J. Kirsch

Even prior to 2020, commercial real estate was experiencing setbacks. Coupled with the challenges of new working environments and less need for commercial spaces, landlords are left with increasingly vacant buildings to fill. Below is a primer on how to move forward.

Pile of old chairs and office equipment with blue backdrop

Changing for the Better


by Justin Smulison

Joseph Brophy’s Austin-based boutique firm comprises some of the most talented and experienced civil litigators in Texas.

Betting on Finance, Civil Litigation Success

Sharpening the Sword: What You Need to Know About CASPA


by Eric B. Smith

How the Contractor and Subcontractor Payment Act (CASPA) can radically change the stakes of how you build. Learn what CASPA means for your construction projects and contract disputes.

How CASPA Impacts Commercial Real Estate

Trending Articles

The 2024 Best Lawyers in Spain™


by Best Lawyers

Best Lawyers is honored to announce the 16th edition of The Best Lawyers in Spain™ and the third edition of Best Lawyers: Ones to Watch in Spain™ for 2024.

Tall buildings and rushing traffic against clouds and sun in sky

Best Lawyers Expands Chilean 2024 Awards


by Best Lawyers

Best Lawyers is pleased to announce the 14th edition of The Best Lawyers in Chile™ and the inaugural edition of Best Lawyers: Ones to Watch in Chile™, honoring the top lawyers and firms conferred on by their Chilean peers.

Landscape of city in Chile

Announcing the 2023 The Best Lawyers in America Honorees


by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

The Best Lawyers in Spain™ 2023


by Best Lawyers

Announcing Spain's recognized lawyers for 2023.

Flag of Spain

Announcing The Best Lawyers in South Africa™ 2024


by Best Lawyers

Best Lawyers is excited to announce the landmark 15th edition of The Best Lawyers in South Africa™ for 2024, including the exclusive "Law Firm of the Year" awards.

Sky view of South Africa town and waterways

The Best Lawyers in Portugal™ 2024


by Best Lawyers

The 2024 awards for Portugal include the 14th edition of The Best Lawyers in Portugal™ and 2nd edition of Best Lawyers: Ones to Watch in Portugal™.

City and beach with green water and blue sky

The Best Lawyers in South Africa™ 2023


by Best Lawyers

Best Lawyers proudly announces lawyers recognized in South Africa for 2023.

South African flag

The Best Lawyers in Peru™ 2024


by Best Lawyers

Best Lawyers is excited to announce the landmark 10th edition of The Best Lawyers in Peru, the prestigious award recognizing the country's lop legal talent.

Landscape of Peru city with cliffside and ocean

The Best Lawyers in Chile™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms in Chile.

White star in blue box beside white box with red box on bottom

The Best Lawyers in Colombia™ 2024


by Best Lawyers

Best Lawyers is honored to announce the 14th edition of The Best Lawyers in Colombia™ for 2024, which honors Colombia's most esteemed lawyers and law firms.

Cityscape of Colombia with blue cloudy sky above

Announcing the 2024 Best Lawyers in Puerto Rico™


by Best Lawyers

Best Lawyers is proud to announce the 11th edition of The Best Lawyers in Puerto Rico™, honoring the top lawyers and firms across the country for 2024.

View of Puerto Rico city from the ocean

Best Lawyers: Ones to Watch in America for 2023


by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

The 2023 Best Lawyers in Portugal™


by Best Lawyers

Announcing the elite group of lawyers recognized in Portugal for 2023.

Green and red Portuguese flag

Unwrapping Shrinkflation


by Justin Smulison

Through the lens of the United States, we take a closer look at the global implication of companies downsizing products while maintaining and often raising prices.

Chocolate bar being unwrapped from foil

2021 Best Lawyers: The Global Issue


by Best Lawyers

The 2021 Global Issue features top legal talent from the most recent editions of Best Lawyers and Best Lawyers: Ones to Watch worldwide.

2021 Best Lawyers: The Global Issue

Announcing the 2023 The Best Lawyers in Canada Honorees


by Best Lawyers

The Best Lawyers in Canada™ is entering its 17th edition for 2023. We highlight the elite lawyers awarded this year.

Red map of Canada with white lines and dots