How to Choose, Use, and Better Understand Climate-Risk Analytics | Urban Land Institute & La Salle

Real estate professionals use climate-risk analytics to navigate evolving risks and improve decision-making.

Real estate professionals are increasingly using climate-risk analytics to assess the impact of climate change on their assets. These tools evaluate physical risks such as extreme weather events and sea-level rise, helping investors manage potential future hazards. However, due to differences in data and models, risk scores for the same asset can vary significantly, making it essential for real estate managers to understand and compare various climate-risk analytics providers.

A key challenge is translating complex climate science into actionable investment decisions. Institutions are integrating physical risk data into pricing models, exit strategies, and capital expenditures, though the process is still evolving. Many are working to align risk assessments with their strategic needs, and leading investors are embedding climate risk into acquisition, management, and disposition decisions.

While some providers offer simplified tools, others provide detailed climate data tailored to specific assets and portfolios. Understanding the assumptions behind each model, including future climate scenarios and data sources, is critical for informed decision-making. Institutions must also consider regional and local factors such as building codes and public infrastructure when assessing risks.

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