A majority of international investors in the U.S. property market were not happy with the way the industry prices climate risk in proformas and valuations. Only three percent of respondents strongly agreed that climate risk is appropriately priced. Buildings are made to last decades, which is why investors often employ long-term strategies when making an investment. Before finalizing a deal, investors go through an extensive process, including valuation, cash flow analysis, and risk assessment of the asset. With climate patterns changing, the importance of considering physical or transitional climate risks is to increase.
Real estate investors' opinion on the state of climate risks pricing in proformas and valuations in the United States in 1st quarter 2023
institutional investors, pension funds, asset managers, and other leading global organizations with approximately three trillion U.S. dollars in assets under management.
Supplementary notes
Respondents were asked whether climate risks were appropriately priced in proformas and valuations.
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AFIRE. (May 9, 2023). Real estate investors' opinion on the state of climate risks pricing in proformas and valuations in the United States in 1st quarter 2023 [Graph]. In Statista. Retrieved January 08, 2025, from https://www.statista.com/statistics/1414765/climate-risk-pricing-real-estate-investment-usa/
AFIRE. "Real estate investors' opinion on the state of climate risks pricing in proformas and valuations in the United States in 1st quarter 2023." Chart. May 9, 2023. Statista. Accessed January 08, 2025. https://www.statista.com/statistics/1414765/climate-risk-pricing-real-estate-investment-usa/
AFIRE. (2023). Real estate investors' opinion on the state of climate risks pricing in proformas and valuations in the United States in 1st quarter 2023. Statista. Statista Inc.. Accessed: January 08, 2025. https://www.statista.com/statistics/1414765/climate-risk-pricing-real-estate-investment-usa/
AFIRE. "Real Estate Investors' Opinion on The State of Climate Risks Pricing in Proformas and Valuations in The United States in 1st Quarter 2023." Statista, Statista Inc., 9 May 2023, https://www.statista.com/statistics/1414765/climate-risk-pricing-real-estate-investment-usa/
AFIRE, Real estate investors' opinion on the state of climate risks pricing in proformas and valuations in the United States in 1st quarter 2023 Statista, https://www.statista.com/statistics/1414765/climate-risk-pricing-real-estate-investment-usa/ (last visited January 08, 2025)
Real estate investors' opinion on the state of climate risks pricing in proformas and valuations in the United States in 1st quarter 2023 [Graph], AFIRE, May 9, 2023. [Online]. Available: https://www.statista.com/statistics/1414765/climate-risk-pricing-real-estate-investment-usa/
