Hurricane Michael Makes Landfall As Category 4 With Billions Of Dollars In Commercial Property In Its Path
By the time Carol Dover awoke at the crack of dawn Wednesday morning, Hurricane Michael had been upgraded to a Category 4 storm.
Dover, the CEO of the Florida Restaurant & Lodging Association, had to load her horse in a trailer at the training facility in Destin, Florida, where she stayed Tuesday and flee back to her home in Tallahassee. It was not much better there.
“I don't remember one creeping [up] on us like this,” Dover told Bisnow from her Tallahassee home. "It was a 1, a 2 [category storm], then you wake up and it's a Category 4."
Hurricane Michael struck the Florida coast Wednesday with winds in excess of 150 miles per hour.
Never in the history of the Florida Panhandle since records were first taken in 1851 has such a storm hit the northern part of Florida, putting more than $1B in Southeastern commercial properties in its bull's-eye.
“We've never seen a Cat 4 storm hit the Panhandle, but my goodness, to be on the doorstep of a Category 5 ...” National Hurricane Center Director Rick Knabb said during a Weather Channel broadcast Wednesday.
The extent of damage to structures along the path of the hurricane is still unknown, but experts say there are billions of dollars worth of commercial properties that are potentially exposed to Hurricane Michael.
Morningstar Credit Ratings reported that 211 properties backed by $1.2B in securitized commercial mortgages were at risk along a 100-mile radius of Hurricane Michael's expected path. CoreLogic reported Wednesday that $13.4B in more than 50,000 homes was at risk from the hurricane's expected storm surge along the Florida Panhandle, as well as up to $1.5B in commercial properties.
By 10 p.m. Wednesday, more than 320,000 people were without power in the Florida Panhandle, and up to 500,000 people in North and South Carolina are projected to lose power when the storm reaches them, according to Duke Energy.
The state of Florida issued the order for residents in 13 counties to evacuate, affecting an estimated 375,000 people, Florida Department of Emergency Management Communications Director Alberto Moscoso wrote in an email.
By 2 p.m. Wednesday, Dover said portions of her backyard were already flooded and the winds were picking up violently around her home.
“We're known in this area for big, beautiful oak trees and I'm sure we're going to lose a lot of them,” Dover said. “We're already just about underwater out in the back. I don't see a lot of grass.”
CBRE Senior Managing Director Patty Nooney, who is in charge of asset services in Florida for the brokerage giant, said the firm manages five grocery-anchored retail centers encompassing about 1M SF along the Panhandle, including in Destin, Fort Walton, Panama City and Tallahassee.
As of Wednesday evening, she had yet to receive reports of damage, but CBRE employees were waiting for mandatory evacuation orders to be lifted before returning and checking on the properties, Nooney said.
CBRE had boarded up windows on the storefronts, secured items like trash cans and signs, and generally prepared for Michael.
“We really had the properties locked down and secured as of yesterday,” Nooney said. "Most of the problem is waiting for the roads to clear for people to get in."
Nooney has been through four hurricanes in Florida during her tenure at CBRE, and while each storm is different, most of the damage she expects with Michael will likely be wind-related.
“We have seen more wind damage and just a lack of properties being able to open due to a lack of power,” she said.
While the worst of Hurricane Michael may have passed the Florida coast, areas in Central and South Georgia and the Carolinas are now in the crosshairs of the storm, which was expected to weaken, but remain a Category 1 storm through the state of Georgia.
This may be bad news for North Carolina, which is still reeling from the aftereffects of Hurricane Florence a month ago, where estimates put the dollar damage at $33B.
North Carolina and Georgia both declared a state of emergency on Wednesday ahead of Hurricane Michael’s arrival. Michael will be mostly a wind and rain event in the Carolinas, with flash flooding as the major concern, according to local NBC affiliate WCNC’s chief meteorologist, Brad Panovich.
However, with a coastal area already battered by Hurricane Florence, residents and business owners braced for what was to come.
“Well, Florida is going to get destroyed as this monster hits them, which is sad. It will be 20 times worse than what we got, so hoping for the best,” said Jerry Hebert, who owns a restaurant in Carolina Beach near Wilmington and a few miles north of the border between North and South Carolina. “My employees ... are afraid of being trapped with nowhere to go. They also can’t sustain losing more time from work as they still haven’t recovered from the last one.”
Hebert planned to keep Buzz’s Roost at the Beach open on Thursday as long as the restaurant had power and conditions were safe.
“The biggest issue is power. If we lose it, then I lose all the food in freezers and coolers, which is thousands and thousands of dollars," he said. "But overall, the sense of panic doesn’t seem to be here for this one.”
Grace Hunter planned to wait out the storm from her home in Morehead City, North Carolina. She said her family was terrified and still has tarps on their roof from Hurricane Florence damage.
“I fear since we have dropped out of the news, most people have forgotten how devastated we have been as a community," she said. "All we can do now, I pray that we make it through another one, pray that we don’t have further damage and pray that our tarps hold.”
The Florida Restaurant & Lodge Association tallies more than 10,000 hotel and restaurant owner members, with at least a couple of thousand members along Florida's Panhandle, Dover said. She said her organization — which works closely with the Federal Emergency Management Agency — has already helped place evacuees in hotels as far away as Orlando and Jacksonville and even into Alabama.
“The problem is there were a lot of people who chose not to evacuate,” she said.