How Incremental CRE Actions Add Up to Resilience

By Abby Ross, Contributing Author for The Epicenter and CEO / Founder of The Resiliency Company

Most organizations working on climate resilience have a good idea of what needs to happen. The harder question is how.

Last year, The Resiliency Company created a playbook for commercial real estate. From Vulnerability to Value, A Risk Mitigation Playbook to Drive Resilient Development is designed to show how the ecosystem of stakeholders in the sector—such as lenders, investors, developers, owners, designers, contractors, and insurers—can work in coordination to reduce weather-related risk and unlock new value.

We took an early draft to an event at Climate Week NY in 2025 to get feedback from industry leaders. Everyone was in alignment with the premise and utility of the playbook and acknowledged that the industry already has the knowledge, technology, and standards for risk reduction.

​However, when we broke out into groups to explore how to actually operationalize the playbook in the context of the various stakeholder silos, the realities and obstacles to change became very real. Participants expressed the challenges of people not wanting to break out of what they currently do. I watched as people who were bought in on the concepts wrestled with the implementation and justification of how to directly attribute ROI.

It makes sense. We’ve built our current operating and investing models on assumptions and dynamics that, for many years, we haven’t had to revisit. America's infrastructure was built during a period of relative climate stability—when weather could be treated as a constant.

However, that’s no longer true. Now, owners, investors, developers, architects, and others in the commercial real estate development space need to rethink how projects get financed, how risk gets priced and allocated, and how building codes accommodate the next decades of extreme weather. As they say, what got us here won’t get us there.

Success Is Not Always Everything, Everywhere, All at Once

In the executive summary of the Risk Mitigation Playbook, we wrote, “The time for incremental change has passed. Success demands decisive, collaborative action across the entire CRE ecosystem.”

Those words were intended to spark action—more rallying cry than nuanced analysis. As time has passed, I’ve come to disagree. Yes, we’re seeing a meteoric increase in the number of billion-dollar disasters in the United States. Yes, investing and building with resilience is a strategic imperative. Yes, we need to move quickly.

But what we need more is the broad adoption of incremental change. Incrementalism is often dismissed as not scalable enough to translate into population-level outcomes. But a series of incremental changes, conducted by various stakeholders in concert, can translate into new norms, higher standards, and more resilient cities.

Changing an RFP process to reward resilience or aligning beneficiaries in the predevelopment phase of a project isn’t going to earn headlines. But they represent the kind of incremental steps necessary for future progress.

​Below, I want to point out several opportunities for incremental change in the CRE ecosystem. Each one, by itself, might not amount to much, but when they’re stacked on top of each other, the results can be remarkable.

Opportunities for Incrementalism

In commercial real estate, the people with the most influence over a project's risk profile are rarely the ones who ultimately bear that risk. Developers make the decisions that determine how much a building can withstand, and then hand it off. Lenders underwrite the asset and then exit. Contractors build to spec and move to the next project. The risk ultimately lands with owners, insurers, and communities. Incremental steps matter because they can shift behavior for each stakeholder, without waiting for the whole system to realign.

Drawing from our Playbook, I’ve highlighted several opportunities for incremental improvements for different stakeholders in the CRE ecosystem.

Lenders

Lenders shape which projects get built and on what terms, but they rarely hold risk long enough to feel the consequences. Small changes can close that gap.

1. Flag storm-affected assets for re-underwriting. Add a single “physical risk” line to the post-closing review template. Any asset that experiences a storm or fire event during the loan term is re-underwritten at the time of refinance, rather than rolling forward on stale data.
2. Build a watchlist of your most-exposed loans. Pull a free FEMA Risk Index or Future Risk Index report on the top 5% of most-exposed loans in the existing book and track them quarterly.

Investors

Investors set the financial assumptions that flow through the rest of the deal: pro forma, IC memo, hold period, and exit cap. One changed assumption on one deal can reshape what the IC approves.

1. Screen for hazard exposure before LOI. Add a single screening question to the deal-pipeline tracker before the LOI: Is the site in a flood zone, a fire zone, or in a jurisdiction with a Building Performance Standard? 3 yes/no fields.
2. Model insurance costs with escalation. For new acquisitions in high-exposure markets, replace the flat insurance-cost line in the pro forma with a modeled escalation curve. According to a Deloitte report (cited in the Playbook), commercial buildings in Florida, California, and Texas have seen 31% year-over-year and 108% five-year increases in insurance premiums. The typical pro forma still trends premiums with general inflation. Model one deal on a realistic curve and let the investment committee see what the asset actually looks like by year seven.

Developers and owners

The developer has the greatest influence over pre-development decisions and the least exposure to their long-term consequences. A small change on their part can transfer less risk to the future owner, the insurer, and the lender.

1. Require above-code resilience in one RFP. Change RFP language on one project to require resilience above code for one specific hazard: wind-rated glazing above local code in Miami or a higher stormwater design in Houston. Pair it with an explicit line that the design team will be evaluated on how they meet that requirement.
2. Get the insurance broker into pre-development. Bring the insurance broker into the project kickoff meeting during pre-development. The broker can flag which underwriting will reward and which will penalize before any design is locked in.

Design teams

The decisions design teams make in the first few months of a project drive most of a building’s lifetime risk.

1. Show clients both the historical and the forward-looking numbers. On one project, run a single load or hazard analysis against both historical data and a forward-looking climate scenario, and show the client both numbers. A civil engineer can model stormwater design under the local rainfall standard and under projected mid-century rainfall.
2. Model out what resilience saves. Run a life-cycle cost analysis on one project that shows the avoided-cost benefit of a single resilience measure.

Contractors

Contractors typically weigh in last on resilience decisions and absorb the consequences first when those decisions don’t account for actual site conditions.

1. Replace “act of God” with a named-perils list. Replace generic “act of God” language in one subcontract with a specific list of named perils: hurricanes above a particular category, wildfire smoke days above an AQI threshold, and named winter storms. Tie the time extension and cost-reimbursement consequences to each one.
2. Price weather delays on projected data instead of historical averages. Build a forward-looking weather-day allowance into the construction schedule based on regional climate projections rather than a historical average. Construction projects worldwide are delayed by weather 45% of the time.

Insurers

Insurers have a simpler job than they think: signal that resilience matters, and show what it does to coverage.

1. Show your work on one renewal. Add a one-page renewal addendum that names 2 or 3 specific measures (a FORTIFIED roof, impact-rated glazing above code, elevated mechanical equipment) and shows what each would have done to last year's premium or coverage decision. You don't need to commit to a discount schedule. Just show your work on one renewal.
2. Make advisory available before design, not after. Offer a free pre-design consultation to 1 or 2 large clients who request it. Aon, Marsh, AXA XL, and FM already have advisory teams. The move is making that capability available before design rather than after, when insurer input is cheapest for everyone.

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None of these changes requires coordination across the value chain to take effect. Each action works on its own, and when enough actors make enough small moves, the cumulative effect can become a new standard of practice.

Pre-Development Is the Leverage Point

Pre-development is where leverage is highest. This is why Shalini Vajjhala and Caroline George, leaders at PRE Collective, argue in a recent Insurance for Good blog post, “Why Resilience Finance Starts with Predevelopment,” that “In many ways, the business case for resilience looks more like preventative healthcare or early childhood education than traditional capital planning or infrastructure finance. Early action creates the greatest value.” Incremental change isn’t flashy. It flies below the radar. But it’s also where we need to start.

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