Climate resilience, sustainable development, ESG, coastal resilience, regenerative development.
As the Caribbean grapples with the economic challenges posed by climate change, green bonds have emerged as an essential tool for financing sustainable development.
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On February 6, theUrban Land Institutewill be hosting a global resiliency webinar that will include three experts from around the world to discuss how we can best protect our built environments from sea level rise, flooding, and erosion. See link below to register for the*February 6, 10:00am ESTevent:https://americas.
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As sea level rise, coastal storms, flooding, erosion, and subsidence increasingly threaten our coastal communities, many land use professionals have been innovating solutions. In this webinar, speakers from design, engineering, and finance backgrounds will feature case studies of coastal resilience strategies in real estate and land use.
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Hotel Investment Today Article
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Ponce Paradise in Ponce, Puerto Rico, receives the AIA Potomac Valley 2023 award for Urban Design and Master Planning.
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As climate-related events become more frequent and more costly, resilience has evolved from an environmental aspiration into a financial imperative.
For developers, investors, lenders, insurers, and public officials, the question is no longer whether to build resiliently—it is how quickly resilient design can become the new standard.
Few places illustrate this transformation better than Babcock Ranch in southwest Florida.
Often recognized as America’s first solar-powered town, Babcock Ranch is much more than a sustainability success story. It is a real-world demonstration that resilient planning, thoughtful engineering, and environmental stewardship can protect lives, preserve property values, and create stronger long-term investment returns.
The stakes could not be higher.
Nearly 80 percent of Florida’s 22 million residents live within 10 miles of the coastline, making the state one of the world’s most climate-exposed real estate markets. Hurricanes continue to increase both in frequency and financial impact. Hurricane Ian alone caused an estimated $84 billion in damages, making it one of the costliest natural disasters in U.S. history.
As existing infrastructure ages and population growth accelerates across coastal regions, communities can no longer afford to rebuild using yesterday’s standards.
They must design for tomorrow’s realities.
Expected to house more than 50,000 residents at full buildout, Babcock Ranch has attracted worldwide attention not simply because of its approximately 800-acre solar energy installation, but because of how it performed when tested under real-world conditions.
When Hurricane Ian struck southwest Florida in September 2022 with sustained winds exceeding 100 miles per hour, the community emerged largely intact. Homes experienced minimal damage, underground utilities remained operational, residents were able to shelter safely in place, and the town even provided refuge for neighboring communities affected by the storm.
That level of performance was no accident.
It resulted from decades of intentional planning.
Recently, I had the opportunity to visit Babcock Ranch alongside Amanda Staerker, one of the project’s early land planners. Walking the community reinforced an important lesson: resilience is not created by a single technology or building material. It is the product of thousands of interconnected planning decisions.
From the outset, the development incorporated Florida Green Building standards, underground utility infrastructure, native landscaping, extensive stormwater management, preserved wetlands, and a master plan that works with the natural environment rather than against it.
Perhaps most importantly, Babcock Ranch demonstrates that sustainability and economics are not competing objectives.
They reinforce one another.
Resilient communities experience less physical damage, shorter business interruptions, lower long-term maintenance costs, greater insurance confidence, stronger investor interest, and higher long-term asset values. For developers, resilience is increasingly becoming one of the strongest drivers of financial performance.
As Syd Kitson, CEO of Babcock Ranch, observed in a recent Urban Land Institute article:
“Storm safety was absolutely at the top of our list… How could we convince people they could shelter in place? We knew if we did it right from the beginning, we could prove they could.”
That philosophy offers valuable lessons well beyond Florida.
Across the Caribbean, coastal communities face many of the same challenges: stronger storms, rising insurance costs, aging infrastructure, and growing demand for sustainable development. The principles demonstrated at Babcock Ranch—working with natural systems, preserving ecological assets, investing in resilient infrastructure, and planning for long-term adaptation—are directly applicable throughout the region.
At AG&T, we believe the future of real estate development lies at the intersection of resilience, sustainability, hospitality, and sound economics.
Building resilient communities is no longer simply about reducing environmental impact.
It is about protecting investments, strengthening local economies, preserving communities, and creating places capable of thriving for generations.
Resilience is no longer a feature.
It is the foundation of responsible development.
I have recently released a new book that explores new solutions for real estate, technology and climate change*“Why Puerto Rico Now: A masterplan for resurgence, resiliency, and long-term economic growth.”In the book, I discuss our current challenges and opportunities for the insurance sector.www.whypuertoriconow.
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Excerpts from the 2020 ULI | Heitman Report.
ULI partnered with Heitman, a global real estate investment management firm, to assess the potential impacts of climate change on the long-term viability of real estate assets. Derived from a series of interviews with leading institutional investors, investment managers, investment consultants and others, the report provides members with an inside look at how real estate investors are factoring climate risk into their investment decision-making and management processes.
See full report at : https://knowledge.uli.org/en/Reports/Research%20Reports/2020/-/media/b81db4bbc77845f7834f24b0e974dd7a.ashx
ULI publishes this updated report amid a global pandemic and economic uncertainty. For many, it may feel as if the priority of addressing climate change is dissipating as we face the immediate challenge of COVID-19. Although it is still too early to draw conclusions about the long-term implications of COVID-19 for our cities and the real estate industry, such a wide-scale humanitarian crisis throws the connections between environmental, social, and governance (ESG) issues and our economies into sharper focus.
However, just as the coronavirus has exposed many weaknesses, it has also shown us that we have the ability to adapt and change our behaviors quickly and radically.
Globally, most major economic hubs are in coastal, river delta, or other high-risk areas. These locations present many advantages, relating to connectivity, trade, quality of life and placemaking. These cities house more than half the global population, with much higher percentages of residents in some regions. About 80 percent of U.S. residents live in cities, for example, 39 percent of the European Union population lives in metro areas with 1 million or more inhabitants.
In 2020 (as of October 7), there have been 16 weather/climate disaster events with losses exceeding $1 billion each to affect the United States. These events included 1 drought event, 11 severe storm events, 3 tropical cyclone events, and 1 wildfire event. Overall, these events resulted in the deaths of 188 people and had significant economic effects on the areas impacted. The 1980–2019 annual average is 6.6 events (CPI-adjusted); the annual average for the most recent 5 years (2015–2019) is 13.8 events (CPI-adjusted).
Many of the most economically powerful coastal cities face significant climate risk. However, these cities offer some of the most attractive investment environments, meaning that the risk is worth the return. “We have a dilemma that some of the most attractive markets are also markets that are affected more by weather-related risks,” noted one real estate investment manager. However, a few investors indicated that they are beginning to suspend acquisitions or take steps to reduce their real estate footprint in city markets where they harbor climate-risk concerns. The phases after a big disaster, according to one interviewee, were to see the market buoyed up by subsidies and insurance, followed by rebuilding and speculative demand. This short-term “sugar high” of disaster support, insurance claims, and opportunistic investment likely masks underlying negative and fiscal impacts that could be exacerbated by future climate-related events (or other shocks).
The research found a number of misleading correlations, such as flooding having a positive impact on cash solvency and fiscal health, and hurricanes increasing budget solvency. However, the current model of contingencies will not be sustainable with the expected increase in the frequency and intensity of climate change impacts, as well as slow-moving stresses such as sea-level rise, which further exaggerate the effect of peak events. In other words, a weather-related event has not yet adequately “shocked” the system of contingencies as to break it. However, the COVID-19 crisis may prove to be the ultimate shock to the system that breaks it. What happens when that “extreme event” is no longer a geographically or temporally discrete event?
“There are three big mechanisms through which costs are likely to increase going forward: one is insurance, [and] the second area is . . . tax rates and the third is cost of financing as banks start to cost the added risk.
BlackRock, the world’s largest asset manager, made headlines in January 2020 when Larry Fink, the firm’s CEO, stated in his annual letter on corporate governance that “climate change has become a defining factor in companies’ long-term prospects,” and “we are on the edge of a fundamental reshaping of finance.” The BlackRock announcement signified an increasing industry prioritization of climate change mitigation, or efforts to prevent or reduce greenhouse gas emissions.
Most interviewees also expressed overall uncertainty about future insurance prices and the likely market impacts of shifting insurance policy. In an extreme scenario, some investors envisioned a future in which properties could not qualify for insurance at all and therefore became ineligible for loans. The annual insurance pricing structure can underpredict risk for longer hold periods, as well as for the underpinning infrastructure. The approach also assumes the long-term availability of underwriting capabilities, in terms of the affordability and availability of products. If sites are unable to obtain insurance, they will not be eligible for loans, leading to major potential valuation consequences.
Long-term focus: In lay terms, catastrophe models simulate “thousands of versions of next year,” not “thousands of successive years.”
All agreed that valuation is currently lagging behind recognition of climate risk and anticipate this changing in the near future. Valuation does not incorporate climate risks because it is “backward-looking”. Models typically do not allow a user to modify future climate conditions, and there are no established best practices to apply insights from climate science to catastrophic hazard risk modeling. Valuation has become more urgent for investors considering longer time horizons. Some investors have also informally discussed properties having “expiration dates” after which they may no longer be safe or suitable for residential or business use without extensive investment in surrounding infrastructure.
Anticipating steep declines in building value because of climate impacts runs counter to how buildings are currently valued. In the current model, value is derived from the residual value of the land and structure, plus discounted cash flows over time that drive net present value and cap rates. However, if dramatic changes lead the value of the structure and land to approach zero, cap rates would change significantly, with a steep decrease in value after purchase, and would need to be offset with increased cash flow and profitability to maintain net present value.
Several discussed efforts to design risk mitigation strategies for vulnerable assets and price these costs into deals. Some also spoke about resilient design as presenting opportunities to differentiate assets and enhance value. For example, one interviewee said they were exploring opportunities to create a “resilience zone” for entire neighborhoods.
Parametric insurance, where insurance payouts are linked to when predefined event parameters such as extreme weather events are met or exceeded, is an emerging option. Industry leaders note that parametric insurance may become more widespread, but it is not an appropriate solution for all scenarios. The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is one example of a regional fund. #heitman
AG&T is committed to being part of the climate solution. AG&T joined over a thousand leaders from local governments, businesses, universities, and other institutions across the country as part of the “America Is All In” joint statement. To learn more click here.
For decades, sustainability was often viewed as an aspirational goal—a desirable feature that enhanced a project’s brand, improved public perception, or satisfied environmental objectives.
Today, that conversation has fundamentally changed.
Across the Caribbean, resilience has evolved from an environmental initiative into one of the most important drivers of long-term financial performance.
Developers, institutional investors, lenders, insurers, hotel operators, and governments increasingly recognize that resilient design is no longer optional. It is becoming a prerequisite for preserving value, attracting capital, reducing operating risk, and ensuring that hospitality assets remain competitive for generations.
At AG&T, we have long believed that the future of Caribbean development lies at the intersection of economics, engineering, hospitality, and environmental stewardship.
That belief inspired one of the Urban Land Institute Caribbean Council’s most forward-looking conversations: Returns on Resilience, bringing together internationally recognized experts from finance, architecture, engineering, and sustainability to examine how resilient design is reshaping real estate investment.
The discussion featured:
Jan Raes, Global Sustainability Advisor, ABN AMRO
Esteban Biondi, Associate Principal, ATM
Koen Olthuis, Co-Founder, Waterstudio.NL
Adam Greenfader, Managing Partner, AG&T
Together, the panel explored a fundamental question:
Can resilience create superior investment returns?
The answer was a resounding yes.
Institutional capital has undergone a profound transformation over the past decade.
Major pension funds, sovereign wealth funds, insurance companies, banks, and private equity firms increasingly evaluate climate resilience alongside traditional underwriting metrics such as location, occupancy, and projected cash flow.
Today’s investors ask very different questions:
Can this property withstand stronger hurricanes?
How will sea level rise affect long-term value?
What is the projected cost of insurance over the next twenty years?
How resilient are the building systems?
Can the project maintain operations following a major storm?
Does the development reduce long-term environmental risk?
Increasingly, these answers influence financing decisions, insurance pricing, investment returns, and exit valuations.
Resilience has become a core component of fiduciary responsibility.
The discussion emphasized that resilient development should not be viewed simply as an added construction expense.
It should be viewed as an investment.
Resilient projects often benefit from:
Lower long-term operating costs
Reduced insurance premiums
Improved access to financing
Stronger lender confidence
Higher institutional investor interest
Faster post-storm recovery
Greater asset liquidity
Improved guest confidence
Longer building life cycles
Enhanced long-term property values
For hospitality assets in particular, every day a hotel remains operational after a major storm protects revenue, employees, guest relationships, and brand reputation.
The financial value of remaining open can far exceed the incremental cost of building resiliently from the beginning.
The conversation also challenged a common misconception.
Sustainability is not simply about achieving certifications or incorporating environmentally friendly materials.
True resilience requires a comprehensive approach that integrates architecture, engineering, infrastructure, energy systems, coastal protection, water management, emergency planning, and long-term operational strategy.
Developments must be designed not only to survive future climate events—but to continue operating through them.
That shift represents a new philosophy for Caribbean development.
Rather than designing for average conditions, projects must increasingly be designed for future conditions.
Perhaps one of the most fascinating discussions centered on aquatic architecture and the remarkable experience of the Netherlands.
For more than a thousand years, the Dutch have lived with water rather than attempting to conquer it.
Long before climate resilience became a global priority, Dutch engineers, planners, and architects developed sophisticated strategies for flood management, floating communities, adaptive infrastructure, and integrated water systems.
Companies such as Waterstudio.NL have transformed centuries of accumulated knowledge into innovative approaches that are now being implemented around the world.
For island nations throughout the Caribbean, these lessons are becoming increasingly relevant.
As sea levels rise and coastal environments evolve, the question is no longer whether architecture should respond to water.
It is how quickly we are prepared to embrace that reality.
Aquatic architecture is not science fiction.
It represents an evolution in urban planning that includes floating homes, floating hotels, adaptive marinas, amphibious structures, floating public spaces, and waterfront communities designed to work in harmony with changing environmental conditions.
For the Caribbean, where coastlines define both our identity and our economy, these ideas deserve serious consideration.
Hospitality has always depended upon extraordinary locations.
Many of the world’s finest resorts occupy beaches, bays, lagoons, and waterfronts that also happen to be among the most environmentally vulnerable landscapes on earth.
Protecting these destinations requires more than stronger buildings.
It requires integrated planning that combines resilient architecture, renewable energy, advanced water management, nature-based coastal defenses, intelligent infrastructure, and thoughtful master planning.
The most successful hospitality destinations of the future will likely be those that embrace resilience not as a regulatory requirement, but as a defining competitive advantage.
Guests increasingly value destinations that demonstrate environmental leadership.
Investors increasingly reward projects that reduce long-term climate risk.
Lenders increasingly recognize resilience as an indicator of stronger underwriting.
Insurance providers increasingly differentiate projects based upon mitigation strategies.
The market is beginning to place a measurable premium on resilience.
At AG&T, resilience has never been viewed as a niche topic.
It is central to how we think about Caribbean development.
Throughout our work across Puerto Rico, Sint Maarten, and the wider Caribbean, we continue to advocate for development strategies that combine world-class hospitality with resilient infrastructure, renewable energy, regenerative design, and innovative coastal planning.
Our collaboration with global experts—from Dutch aquatic architects and sustainability advisors to institutional investors and hospitality leaders—reflects our belief that the Caribbean has an opportunity not simply to adapt to climate change, but to become a global laboratory for resilient tourism and coastal development.
The islands have always been defined by their relationship with the sea.
The next generation of Caribbean hospitality will be defined by how intelligently we choose to live with it.
Designing sustainably is no longer about branding.
It is about building stronger businesses, protecting communities, preserving irreplaceable destinations, and creating hospitality assets capable of thriving for generations to come.
For the Caribbean, resilience is no longer simply good environmental policy.
It is good economics.
January 29, 2019 – Miami, Florida
Facilitated by Zac Taylor, PhD (Research Fellow, University of Leuven) and Adam Greenfader (Managing Principal, AG&T; chair of Caribbean Council of ULI Southeast Florida/Caribbean) Participants included individuals representing development, insurance, sales, master planning, public sector, legal, and academic perspectives.
Key Messages
Thematic Observations
Insurance – Property Rates and Terms
Location Investment Decisions
Public Finance
Design and Mitigation Considerations
Collaboration / ULI Opportunities
To learn more: uli-selected-to-manage-southeast-florida-regional-climate-compact-project