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How Are Commercial Properties Faring In The Wake Of Florence? Many Owners Don’t Know Yet


As Hurricane Florence left its mark on the Carolinas last week, business owners, property managers and developers are eager to assess potential damages and start rebuilding. But first they have to get their eyes on their properties.

A U.S. Air Force Security Forces Airmen working alongside the Florence County, S.C., Sheriff’s Department, watches as residents walk through a flooded road during evacuation efforts as the Black Creek river begins to crest in Florence earlier this week.

Many roads to the coast are closed, with road conditions changing rapidly. Those who are trying to get back to check on their properties should heed caution and follow North Carolina and South Carolina road advisories, officials said.

Even for property owners who have been able to see their properties, they still may not know the full extent of the damages to come — more flooding is expected in the Carolinas in the days ahead.

“Rivers are still rising in Eastern North Carolina and South Carolina as the crests slow down. This becomes a slow-motion disaster as once the crests gets there, it stays for days,” Charlotte NBC affiliate WCNC’s chief meteorologist, Brad Panovich, told Bisnow on Thursday afternoon.

“In some cases, the worst is yet to come as areas flooded by storm surge and rain last weekend will get flooding from rivers. It boils down to elevation,” Panovich said. “As the rivers get closer to the coast, the slope from inland to sea level flattens out like a table, so the water spreads out and oozes all over.”

Aviators with the North Carolina Detachment 1 Bravo Company, 2nd 151st Aviation Regiment, conduct aerial search missions from a UH-72A Lakota Light Utility Helicopter after Hurricane Florence. The support and security crew scanned homes and structures for individuals in distress, focusing efforts along the Cape Fear river, including the North Carolina areas of New Bern, Wilmington and Lumberton.

At Carolina Beach, North Carolina, near Wilmington, bar owner Jerry Hebert refused to evacuate before the storm, then defied a police curfew and drove through flooded waters Saturday to check on his oceanfront bars. 

Hebert intended to ride out the hurricane with a friend about a mile offshore, but as the storm approached, he found himself unable to emotionally detach from Buzz’s Roost at the Beach, one of two oceanfront bars he owns in the area. He convinced his friend to join him instead.

“I’ve decided to ride it out at the Roost and go down with the ship. I don't have it in me to start all over again,” Hebert said to Bisnow last Thursday morning as the storm approached. “If you can’t tell, I’m heartbroken.”

A few hours later, Hebert and his friend left the restaurant to deliver food to people’s homes. Flooding had already begun. That evening, they decided it might be best to take shelter at the friend’s house after all.

Carolina Beach, N.C., last Thursday, about 30 minutes before the rain began that signaled the beginning of Hurricane Florence.

As the eye of the storm approached, the power went out and there was nothing for the friends to do but wait.

“We won’t know if we are on high enough ground until it happens. We have life jackets and will do the best we can,” he told Bisnow on Friday morning.

On Saturday, he had good news to report — the restaurants had made it. “With a four-day hurricane, I can’t believe our dunes were able to hold up,” he said. “Truly a miracle.”

He was able to survey for damage to his restaurants this week, but it led to a police escort home for breaking curfew and an incident of running away from storm surge. 

But at least he was able to see for himself how his commercial properties were doing. Many other property owners are unable to get to their sites to see what damage, if any, has been done.

BDO’s Forensics Insurance & Recovery practice leader Clark Schweers

At BDO’s Washington, D.C. office, Forensics Insurance & Recovery practice leader Clark Schweers works with commercial real estate policyholders to prepare insurance claims. His clients affected by Florence are reaching out to BDO, asking for advice but without being able to offer much feedback about their own properties.

“We’re working with them, and they’re saying, ‘Hey listen, we want to get your advice to make certain that we’re putting the insurance carrier on notice as to what we’re going to do, but we don’t know how bad it is,’” Schweers said.

“‘We don’t know whether we have structural damage because of the flooding, we don’t know if we just need to remove the drywall, we don’t know if we have major electrical issues or whether the water in these commercial assets went below the electrical box line, so more limited damage,’” he said clients are telling him.

“So in several cases it’s just: ‘We just don’t know at this point and until that water recedes we’re really not going to know.’”

Most of the affected policyholders are from the North Carolina coast, with many from Wilmington and New Bern, Schweers said. Even in Charlotte, about 200 miles inland, one of BDO’s policyholders, a hotelier, called in with a sizable claim due to wind blowing water sideways and causing significant damage in the hotel’s lobby.

“I was surprised, I thought it was very little impact in Charlotte,” he said.

For owners who can't physically reach their properties, drones are playing an active role in the recovery efforts. Some commercial owners are using them to gain intelligence about what is going on at their facilities, Schweers said.