Dr. Jeremy Porter, chief economist at First Street, sat down for a video interview at Nareit’s REITweek: 2026 Investor Conference in New York, June 1-4.
He said physical climate risk has become a mainstream business issue for REITs, and that the industry's focus has evolved significantly over the past decade. Rather than simply identifying whether a property is exposed to flooding or other hazards, investors increasingly want to understand the financial implications.
"People want to actually understand the financials," Porter said. "How does this translate to actual revenues?”
He noted that climate models have become much more sophisticated, allowing real estate owners and investors to answer increasingly complex questions about risk and resilience.
Porter also believes many investors continue to underestimate the likelihood of rare events. A so-called 100-year flood, he explained, represents a 1% annual chance of occurring—not an event that happens only once every century. Over a typical 30-year holding period, that translates into roughly a 26% chance of experiencing such an event.
In addition, Porter said secondary climate risks—including chronic heat, drought, and severe convective storms—are becoming increasingly important as they affect operating costs, insurance, and property performance.
"It's not that the environment's changing and it's going to be bad in 2100," Porter said. "It's that it's already happening."