Pimco Prime Real Estate wants to expand its real estate footprint while shrinking its environmental one.

The $85B investment management arm of Allianz Group is planning to acquire and renovate properties in areas less impacted by climate change and extreme weather, Pimco Prime Real Estate Chief Sustainability Officer Raphael Mertens told Bloomberg.

Although the Trump administration has rolled back some federal initiatives, certain areas of the country have implemented local policies to address climate change, making the investments more appealing.

In New York City, Local Law 97 requires landlords to disclose buildings’ greenhouse gas emissions and risk paying fines if they don’t make efforts to make their properties greener.

New York, Paris, Munich and Sydney are all cities that “have already invested sufficiently in climate-risk countermeasures,” drawing Pimco Prime’s interest, Mertens said.

“We think this could be attractive to clients from a commercial perspective,” Mertens said, adding that there are “opportunities in buying older assets in good locations to upgrade them.”

Meanwhile, property insurers have raised premiums or fully abandoned high-risk areas, like parts of Florida and California. Outside of the U.S., insurance has become unavailable in areas of Asia.

Premiums for commercial properties in the U.S. have increased more than 150% in less than a decade, according to a study by First Street. If owners fail to adapt to climate change, property values could plummet by as much as $1.5T over the next 30 years, the climate risk firm found.

Already, property values in climate-sensitive areas are 17% lower than they are in lower-risk areas, a separate First Street study found.

In Europe, less than a quarter of the losses caused by natural disasters are covered by insurance, according to the European Central Bank. In some countries, it is less than 5%.

“We would never buy a building that can’t find insurance,” Mertens told Bloomberg.

Mertens added that owners “tend to underestimate how fast climate is changing.” Even if a property isn’t currently at risk, it could become vulnerable in the near future.

Pimco Prime may opt to offload properties, though such decisions will be made on a case-by-case basis and include factors like market developments and client requirements.

There are some caveats. Pimco Prime is invested in Miami’s Waterford Business District, close to the city's airport and several miles from the coast. In California, the company owns properties in San Francisco, Palo Alto and Irvine.

“None of these assets are exposed to significant wildfire or other climate-related risks,” Mertens said.