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oseph Sumberg, a former Goldman Sachs executive now working for climate investor Tom Steyer, says commercial real estate deals will increasingly need to factor in rising insurance costs due to more destructive hurricane seasons and less reliable coverage. For Sumberg, who oversees the real estate division of Galvanize Climate Solutions LLC, this is a major consideration: "And property insurance across the US is going up."

    Investors in commercial real estate must now consider the impact of extreme weather patterns on their investments. Sumberg expects climate change to have a significant impact on the property market, affecting physical risks, regulations, and tenant preferences.

    As hurricane season intensifies, properties in high-risk areas are increasingly vulnerable. Insurers are raising premiums nationwide, making it harder for property owners to secure coverage. This trend will continue, with insurance costs becoming a crucial factor in valuations.

    However, Sumberg sees investment opportunities arising from addressing climate-related metrics that alter commercial real estate valuations. Galvanize has made its second acquisition, an industrial property in New Jersey, aimed at optimizing energy efficiency and generating renewable power. The firm plans to invest $1.85 billion over three years in acquisitions and retrofits of buildings.

    Sumberg is optimistic about the potential for scalable investments in climate-resilient real estate, citing opportunities in top target markets such as California, New York, Massachusetts, Maryland, and New Jersey.