Moody’s Estimates $1.1 Trillion in Commercial Real Estate at Risk from Hurricane Milton

Hurricane Milton, a powerful Category 3 storm, made landfall in Florida on Wednesday, threatening more than $1 trillion worth of commercial real estate properties.

According to Moody’s Analytics, over 235,000 commercial properties could face damaging winds, posing a significant risk to the state’s economy and property market.

The properties at risk include a wide array of commercial buildings, such as 44,000 industrial spaces, 79,000 retail properties, 42,000 office buildings, and over 64,000 apartment buildings. Hotels are also vulnerable, with more than 5,000 in the storm’s path. Moody’s estimated that there is a greater than 50% chance these properties will experience wind speeds of at least 50 miles per hour, which can cause property damage.

Jefferies analysts have projected that the financial impact of Hurricane Milton could reach $175 billion, depending on the region and intensity of the storm. The Tampa Bay area, where the hurricane is expected to cause severe damage, is seen as a particularly high-risk zone.

The hurricane also poses significant challenges to Florida’s already troubled property insurance market. Experts estimate insured losses could range between $60 billion and $100 billion. The state’s insurance sector has been strained for years, with several providers either declaring bankruptcy or pulling out entirely. With Florida’s high insurance premiums and existing financial vulnerabilities, this latest storm could exacerbate the situation, threatening coverage availability and raising costs further.

The National Hurricane Center has warned that Hurricane Milton may bring storm surges as high as 15 feet and widespread flooding, further increasing the potential for damage across Florida. This comes just days after Hurricane Helene devastated parts of the state, leaving the region reeling from its impact.

With input from Business Insider, Reuters, Politico.