Sea Level Rise and Commercial Office Markets in Southeast Florida

Abstract

Sea level rise is an indisputably mounting predicament that has exacerbated consequences in Southeast Florida. In this thesis, we explore the impacts of sea level rise risk in commercial office markets in Miami-Dade County. We examine 560 commercial office properties with sale price records from 2000 to 2020, and 497 commercial office rental properties from 1988 quarter one through 2020 quarter four. For both sales and rental properties, we analyze each sample comprehensively, then we isolate the respective samples first by historic flood amount and then by flood risk metrics. We conclude by segregating properties in high-risk areas by historic flood amount to eradicate property location as a confounding variable.

Our results suggest that properties that have historic exposure to flooding from either or both major recent hurricanes, Katrina in 2005 and Irma in 2017, have lower sales prices and rental values when compared to properties that have not experienced historic hurricane flooding in comparable flood risk zones. Our results also indicate that generally, commercial office properties that are more concentrated near waterfront areas have experienced greater historic flooding and have larger predicted flood risk than properties farther inland.