By Bill Tryon, Chief Strategy Officer & Principal, & Jessica Wright-Kasco, LEED AP, TRUE Advisor, ESG & Resilience Technical Director
Losses from natural disasters have increased dramatically since 1980. According to the National Oceanic and Atmospheric Administration (NOAA), the US has been hit by an annual average of 17 natural disasters that resulted in more than a billion dollars in damage over the last 10 years, more than 5 times the average in the 1980s. Adjusted for inflation, NOAA has estimated total property damage since 1980 at nearly $3 trillion. Actual costs are even higher after accounting for indirect losses such as those from business closures and relocations, operational disruptions, loss of inventory, decreased property value, reduced ROI, cost fluctuations, supply chain disruptions, increased insurance costs, and long-term economic impacts.
To understand how physical risks may affect properties, property owners and investors request due diligence consultants to evaluate the potential for future disasters affecting a property and to assess the expected performance of the property if the disaster occurs. Commonly referred to as a Property Resilience Assessment (PRA), these studies allow owners, operators, and investors to understand the hazards likely to affect a property as well as damage, disruption, and recovery time; and identify ways to reduce or mitigate these risks. Property resilience assessments can assist in managing the risks a business or property is susceptible to help reduce or avoid related damages.
As a developing discipline, the depth of investigation, underlying assumptions, extent of engineering evaluation, and other aspects of PRAs can vary widely. To help bring consistency to the industry, ASTM has published a guide for Property Resilience Assessment, ASTM E3429-24 Standard Guide for Property Resilience Assessments. The guide provides a framework to promote focused and meaningful investigation of properties but does not establish strict parameters for property resilience assessments. As a result, owners, operators, and investors will need to continue to work closely with consultants to refine the evaluation criteria and depth of assessment to make sure that PRA reports reflect their priorities and risk tolerance.
ASTM standards are developed through a consensus process involving users and consultants. Their standards originally focused on addressing material failures in the railroad industry but has expanded to cover a wide range of industries including testing and assessment standards in real estate due diligence, manufacturing, construction, and consumer products. Since 2021, industry experts have worked with ASTM to develop the recently published guide for Property Resilience Assessment.
A client may contract for Stage 1 and stay only in a Stage 1 PRA or follow the entire process from Stage 1 through 3. A client may also contract a PRA for a single building, multiple buildings, or a portfolio of properties. Although much of the PRA guide is directed to the PRA process for existing buildings, the PRA process can also be applied to planned development, new construction, and substantial renovation projects assuming sufficient design detail is provided.
In addition, this guide may be used for a broad variety of structures and infrastructure, though some specialized facilities may require additional expertise. Under the guide, the work is performed in a multi-step process, with successive stages required only when concerns are identified in the current stage. For example, there would be no need to proceed to stage 2 for a property with no significant concerns identified at stage 1; or to proceed to stage 3 have no significant concerns arguing by at stage two.
Because this new guide does not establish firm requirements for how a study should be completed, it will not be possible to simply reach out to a consultant to ask for a property resilience assessment in compliance with the ASTM standard. Users and consultants will need to work together to determine the appropriate approach to each assessment. Variables such as the user’s risk tolerance, extent of climate change to be considered, depth of on-site investigation, basis of estimated impacts, reporting protocols, occupancy, and space use of property, etc. can have a dramatic impact on the assessment and adequacy of reports to satisfy user needs.
Partner’s resilience experts are here to help clients navigate the new ASTM guide and mitigate physical risks to their properties. For more information about the guide or how Partner can help, visit our Resilience service page or contact your Partner Rep. The full Guide is available for purchase from ASTM here.