In the current real estate market, commercial insurance hasn’t impacted transactions because pricing has stabilized and banks are keeping up coverage on the real estate they own.
It’s one of the first things banks pay when they take a property, said Gary Reshefsky, senior VP at MDW Insurance Group in Coral Gables.
Adam Lubkin, president and CEO of Miami-based Ibis Development Group, which helps developers facilitate acquisitions, said costs are a line item for buyers, who are mostly doing all-cash deals. He said many of the same variables that determine risk are a constant, even in today’s market, with some of his clients who look to buy oceanfront property seeing higher insurance rates than those inland.
Reshefsky said some realities of the current market are driving prices higher for some owners and assets. Empty or partly empty assets are paying more for insurance because there is a greater chance of something like fire damaging the property if its sit empty or partly vacant.
But, the rise of reinsurance availability, despite a decrease in the number of carriers offering commercial insurance, continues to be an important driver in stabilizing pricing, he said.
Where insurance is impacting transactions is in leases, where tenants are often required to cover increases that usually come after a hurricane, said David Wigoda, senior VP at commercial brokerage Jones Lang LaSalle, who represented the Pompano Park of Commerce in a 350-square-foot …