'Real Estate Risks Are Simply Gigantic' As Hurricane Irma Approaches

Seaport Global Securities' head of energy trading, Roberto Friedlander, wrote Tuesday "real estate risks are simply gigantic" as the Category 5 Hurricane Irma barreled toward Florida.

Friedlander said Irma was not expected to impact energy infrastructure like Hurricane Harvey did in Texas last week, but damage could still be extensive, CNBC reports.

"There is no modern historical precedent for a Miami hurricane, because the last direct hit was back in the 1920s," Friedlander wrote. "A direct hit from Irma could disrupt rail and container activity and damage infrastructure for transportation, in addition to putting thousands of lives at risk. Combined with rainfall, then we are looking at catastrophic flooding to a vast area that already has problems with water levels."

Irma made landfall in the islands of Antigua, Barbuda and Puerto Rico last night. Its winds — 185 mph — were reportedly the highest in recorded history for an Atlantic Ocean hurricane.

The storm was expected to test Florida's private flood insurance market. Shares of HCI Group, Universal Insurance Holdings and Heritage Insurance Holdings were down 13%, 16% and 13%, respectively, yesterday. The orange juice market was also "going crazy," CNBC reported.

Barclays' Jay Gelb wrote on Tuesday, "In a worst case scenario, catastrophe modelers AIR Worldwide and Karen Clark and Co. have estimated a repeat of the 1926 Miami hurricane could result in $125B-130B of insured damage."

Hurricane Katrina's insured damage, for comparison, was $50B, adjusted for inflation.

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Related Topics: Hurricane Harvey , Hurricane Irma
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