Summary
For the first time since Hurricane Andrew in 1992, Katrina and Wilma caused serious damage to major commercial real estate in central business districts. Property managers in New Orleans and South Florida now face a major dilemma as a result of sustaining so much damage to their properties and changes to how windstorm deductibles are calculated: They must determine whether the high deductible imposed by insurance companies is an operating expense passed through to tenants or a capital improvement expense paid for out of their own pockets. Even where the lease is silent in defining operating expenses, real estate managers will consider the deductible amount as a normal operating expense incurred by commercial properties during the normal course of business.
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Extract
Gloomy Forecast
In 2004, it was Charley, Francis, Ivan and Jeanne. In 2005, it was Dennis, Katrina, Rita and Wilma.
All these hurricanes caused damage and destruction to the...See the full content of this document
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