27 October 2025
Cameron McLaren, Head of Climate Resilience
Changing Seasons and Climate Extreme Real Estate Stress-Testing
As we move away from from summer heat waves, and onto autumn storms, forecasts indicate that impacts on the built environment and its operations will once again again be significant. To safeguard value, strategies and planning must be carefully structured to anticipate and manage projected extremes.
Autumn and Winter 2024-25 brought a new wave of extremes. First came Storm Elara, flooding residential basements in Belgium and tearing the roofs off logistics centres in northern France. Then, just weeks later, a cold wave froze water pipes across German multifamily stock, forcing emergency relocations and costly repairs. For landlords, asset managers, and occupiers, the season’s lesson is clear: Europe’s real estate is being stress-tested by climate conditions it was never built for.
Why the Stress Tests Are Getting Harsher
The drivers of this shift are well documented:
- Warmer, wetter atmosphere: Now, the average storm carries more moisture than in previous years, increasing flood risk.
- Warmer seas: Autumn storms draw additional energy from elevated sea surface temperatures, amplifying wind and rainfall.
- Jet stream instability: Distorted storm tracks make high and low temperature extremes more intense and persistent, increasing damage.
- Arctic amplification: Faster polar warming disrupts circulation, letting cold air plunge deeper into Europe than models previously projected.
Real Estate Designed for Yesterday’s Climate
For decades, design codes, valuation models, and operating assumptions in Europe have been guided by stationary climate patterns. A storm of the future was expected to look much like a storm in the past. That assumption is now wrong and broken.
Drainage and waterproofing in many assets is insufficient for today’s rainfall intensities, leaving car parks, basements, and lift shafts exposed. Heating, ventilation and air conditioning (HVAC) systems are also strained by rapid temperature variation and freeze-thaw cycles, leading to outages or costly energy spikes. Tenant safety and business continuity depend on surrounding infrastructure (power, transport, communication) that itself falters under storm or cold stress. The result is commercial offices, retail, industrial, and residential portfolios experiencing losses, downtime, and reputational hits at an increasing cost and frequency.
Where Real Estate Fails and Why This Matters to Investors and Owners
Recent events have seen many buildings responding poorly, with impacts ranging from structural deterioration caused by flooding, to burst pipes and frozen heating systems during sudden cold snaps, driving up OPEX and CAPEX for landlords. These implications are creating liability risks for occupiers and insurers alike.
Physical hazards can cause more than just engineering issues: they can lead to reduced valuation. The most immediate stressors are liquidity and operational risks. Liquidity risks arise when assets in high-risk zones or with a history of claims face reduced buyer appetite and lower exit values. Operational risks emerge when storm or freeze events disrupt occupier activity, impacting day-to-day performance. Additionally, awareness around increasing regulatory pressure and stranded asset risk, where assets lose insurability and subsequent financial viability, is rising in some regions. The market is waking up to the fact that resilience is no longer an optional add-on, it’s a determinant of medium and long-term yields.
Conclusion: Those who adapt will protect value and attract capital
The key approach for real estate stakeholders must be to treat every storm and cold wave as a real-time stress test and prepare accordingly.
Focus should be on:
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- Flood retrofits,
- Building envelope and structural resilience,
- Operational protection and adaptation,
- and infrastructure dependency checks.
As well as its record temperatures, Europe’s storms and cold waves are not waiting for 2050 scenarios; they are here now and are already rewriting the performance baseline for buildings and portfolios. For owners, investors, and occupiers, the mandate is clear: design for extremes, not averages. Those who adapt will protect value and attract capital, and those who don’t will find their assets stranded by a climate they underestimated.
At Longevity Partners, our Climate Resilience team can support all stakeholders with resilient strategies at corporate, fund or asset-level. With expertise in all phases of the built environment’s life cycle, and their operations, client-tailored implementation planning to build resilience against physical hazards such as storms and cold weather can be supported to ensure asset value protected.
