More than one quarter of commercial real estate in Houston may have been damaged by floods, according to CoStar Group.
The analytics company found that 27% of the gross leasable space of multifamily, office, retail and industrial assets, representing $55bn (€46.2bn) in value, could have been affected by Hurricane Harvey.
Those likely to be worst affected are the 72,000 apartments units within the 100-year floodplain. Another 12,000 properties with 400m sqft of space within the 500-year floodplain are also likely to be flooded, the report said.
Only 9m sqft of space, including 4,000 apartments are within a designated floodway, but most are probably inundated with floodwaters today.
The 175m sqft of space located in the 100-year floodplain, including 72,000 apartment units and 20m sqft of office space, are probably experiencing water incursion. Another 225m sqft sits in the 500-year floodplain and is at some risk of flooding.
The submarket likely to be most affected is Southwest Houston, a highly dense section of the city home to more than 66,000 apartment units, of which nearly 30% are estimated to be affected.
About 5m sqft of space is under construction within the floodplain, including 3,144 apartment units. This represents about one-fifth of the 25m sqft of commercial real estate under construction in Houston, including more than 12,000 apartment units.
The most affected office submarket is Greenspoint, which has elevated vacancies after the departure of Exxon Mobil in late 2015. Here, some 3.5m sqft falls within the 100-year floodplain.
Parkway, the largest owner of Houston offices, said its properties “incurred only minimal damage” and were open for business.
The real estate investment trust (REIT), subject to a takeover by Canada Pension Plan Investment Board (CPPIB), owns 19 buildings encompassing 8.7m sqft in the Greenway, Galleria and Westchase submarkets of Houston.
Parkway said: “The properties maintained power throughout the storm and remained accessible to our customers as needed at all times.
“We expect that all damage will be insurable under our existing insurance policies subject to a nominal deductible.”