In recent years, the growing intensity and frequency of hurricanes have pushed climate risk to the forefront of commercial real estate decision-making. Property vulnerability, once a secondary concern, is now a critical factor in underwriting, site selection, and long-term asset strategy.
NOAA’s 2025 Atlantic forecast calls for 13 to 19 named storms, with 6 to 10 expected to become hurricanes (winds of 74 mph or higher), including 3-5 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher). Forecasters anticipate another unusually active Atlantic hurricane season, though not on par with 2024, which was the third-costliest season on record, driven by destructive storms like Beryl, Helene, and Milton. Last year, NOAA projected 17 to 25 named storms. The final tally reached 20, including 11 hurricanes and five major hurricanes, marking one of the most intense and expensive seasons in recent memory.
The growing accuracy of seasonal forecasts has helped investors and risk managers model exposure more effectively. But storm severity and the scale of post-landfall disruption continues to expand. The U.S. recorded at least three billion-dollar hurricanes in 2024 alone.
“The frequency of storms and the severity of climate-related hazards has grown exponentially…insurance rates are skyrocketing, and suddenly that’s a cost of doing business that investors and lenders can’t ignore,” said Holly Neber, Chief Resilience Officer of AEI Consultants, speaking on LightBox’s CRE Weekly Digest podcast. Neber is also the chair of the ASTM task group that authored the industry’s first climate resilience assessment guide.
This hurricane season, LightBox will publish storm-tracking analyses to help CRE stakeholders visualize environmental impacts in a storm’s area of exposure in real time. The focus isn’t limited to wind speed or surge maps. “We’re looking at flood-triggered risks that don’t show up in the headlines like underground storage tanks, chemical storage facilities, and co-located infrastructure that can introduce serious contamination hazards in the wake of a hurricane,” said Richard W. White, research director, Environmental Due Diligence at LightBox. “In vulnerable markets, what we’ve seen is that a storm does not need to make direct landfall to disrupt property lending, leasing, or valuations.”
Given the broader geographic footprint of major storm events, and the potential for federal agencies like FEMA, under threat of being phased out by the Trump administration, private data sources are expected to play a larger role in storm preparedness and response. LightBox is building a reporting framework to meet that need, combining GIS-enabled overlays, parcel data, and historic environmental datasets to pinpoint risk at the property level.
Where Environmental Risk Hides in the Wake of Hurricanes
When hurricanes make landfall, media and emergency response often focus on visible damage from wind destruction, power outages, and floodwaters. But the environmental risks that follow can be harder to detect and more costly to remediate. The surge of floodwater during a hurricane can cause releases of contaminants from underground storage tanks (USTs), chemical storage facilities, and industrial runoff sites. These hidden hazards are sometimes not tracked in public databases, yet they can create long-term liability for property owners and investors, as well as create concerns for human health and the environment in affected areas. The EPA has documented and responded to such risks in the aftermath of various disasters, highlighting the need for proactive assessment and data transparency.
After Hurricane Katrina, chemical spills and USTs created major cleanup delays across New Orleans. A 2005 EPA report noted that more than 350 USTs were submerged or displaced in Orleans Parish alone, many located near sensitive areas like schools and hospitals. In recent years, risk mapping efforts have expanded to include these less-visible threats, but federal data coverage remains limited.
“There’s a tendency to focus on Superfund sites, which are easier to identify and regulate,” said White. The EPA designates Superfund sites as locations contaminated by hazardous waste and identified for long-term cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
“But there are tens of thousands of smaller facilities with hazardous materials stored on-site, and many of them fall outside traditional regulatory frameworks,” White added. “These are the blind spots our data helps uncover.”
LightBox’s environmental risk models incorporate parcel-level overlays of USTs, brownfield sites, chemical storage facilities, and co-located hazards in commercial corridors. LightBox’s analysis and historical mapping from Hurricane Helene in 2024 showed dozens of at-risk industrial parcels with no prior environmental violations. These locations were overlooked in initial media coverage but later flagged for post-storm remediation.
This category of risk poses a growing challenge for commercial due diligence. If contaminants are released during a storm, lenders and buyers face delays in closing, rising insurance premiums, or future claims tied to cleanup costs. In some cases, these exposures are not immediately visible and can surface during Phase I or II environmental site assessments months after a transaction.
“Risk isn’t always about where a storm hits,” White emphasized. “It’s about what gets displaced once floodwaters rise.”
Capital Flows Respond to Environmental Risk
As awareness about the environmental risk that major hurricanes can cause, environmental due diligence is increasingly addressing storm risk and the vulnerability of properties, particularly in storm-prone areas, to major hurricanes.
In coastal markets or flood-prone regions, lenders and investors are adjusting underwriting assumptions to account for climate volatility, insurance availability, and resilience measures Neber suggested in a May Globest article. “Not only is pricing going up, but deductibles and exclusions are changing, too,” highlighting the evolving challenges in the insurance market.
Climate exposure is no longer viewed as a theoretical risk but as a direct input into real estate strategy, portfolio management, and long-term value protection, according to a 2024 Mckinsey report. Moreover, climate-related real estate investment is accelerating, with private equity funds alone raising more than $100 billion for adaptation-focused opportunities since 2022.
Neber shared that her valuation team notes a clear connection between insurance and pricing dynamics. “Because insurance pricing affects net operating income, it also affects property value,” she said. “People are realizing that certain markets are more problematic from an insurability standpoint, and that, in turn, is affecting property values.”
Investors are also accounting for the immediate and long-term cost of climate resilience. From flood prevention to resilient HVAC systems and wind-resistant roofs, accounting for climate risk is increasingly built into capital planning.
Risk precision is becoming a prerequisite for access to capital.
The Shifting Role of Private Data Providers in Storm Response
Federal emergency response capacity has come under renewed scrutiny heading into the 2025 storm season. In recent months, President Donald Trump has suggested eliminating or severely downsizing FEMA, describing it as “a broken system we shouldn’t be funding anymore.” While no formal policy proposal has been released, the political signal reflects a growing debate over the federal government’s role in climate disaster response.
With federal disaster funding under pressure, the responsibility for identifying storm impacts and prioritizing recovery efforts is shifting. That burden could increasingly fall to state and local governments, many of which are already stretched thin, or to private sector partners with the data and tools to help fill critical gaps. The implications for commercial real estate are significant. FEMA funding has historically supported not only individual recovery efforts but also infrastructure assessments, environmental cleanup coordination, and hazard mapping—all of which are resources that lenders, insurers, and local agencies rely on to guide recovery.
“We’re seeing more cases where the speed and quality of storm response depends on who has access to actionable data,” said Dianne Crocker, research director at LightBox. “That’s increasingly private sector firms, especially when it comes to environmental screening, property-level analytics, and historical exposure models.”
Commercial real estate due diligence is decentralized by nature, and without a standardized federal approach, decision-makers often lean on proprietary data to model storm impact, prioritize risks, and plan remediation.
Crocker emphasized that: “When a storm hits, CRE stakeholders need site-specific data to understand what’s at highest risk in order to direct resources quickly and efficiently.”
Storm Season Is a Test of Resilience and of Insight
The escalating intensity and frequency of major hurricanes is changing how environmental risk is managed in commercial real estate. No longer a long-term strategy, resilience is a near-term consideration that is factoring into where capital flows, how properties are insured, and how owners protect their investments from climate risk exposure.
The expectations placed on data have also shifted. Hazard maps must now operate in days, not months. Traditional environmental site assessments are being expanded to include consideration of a property’s potential for incurring physical damage in the wake of a major storm, as well as any exposure to potential disruption related to environmental risks.
“As storm intensities rise and insurance costs escalate, the commercial real estate sector is entering a phase where each event serves as a critical input for future risk modeling and underwriting decisions,” said Dianne Crocker, research director at LightBox. “Property-level data is no longer optional—it’s essential for understanding exposure, guiding post-storm response, and recalibrating how we assess environmental and physical risk going forward.”
LightBox’s role this season is to help CRE stakeholders move faster, better understand hurricane risk, and respond to those risks efficiently. Storms may be unpredictable, but risk visibility and response no longer have to be.
Subscribe to LightBox Insights for timely analysis on environmental risk and commercial real estate due diligence.
