- Protecting property means planning for both known and unknown risks.
- Recent events have highlighted the need for thorough risk assessment.
- Looking at “what if” scenarios is critical to being prepared.
On this episode of Weaver Beyond the Numbers, Real Estate Edition, Howard Altshuler, Partner-in-Charge, Real Estate Services for Weaver, and Rob Nowak, Partner, Tax Services for Weaver, were joined by Andy Freundlich, Partner, Assurance Services for Weaver, for a lively discussion on risk assessment and management in real estate.
“This last year has been amazing for lots of reasons. We think about how unprepared we are for everything,” Freundlich said.
Certain risks are known when it comes to things like deferred maintenance or entitlement risk, but building managers, asset managers, developers and tenants also face unknown risks.
How do real estate stakeholders prepare for the unknown? What are the what-ifs that haven’t been accounted for, and how do we prepare for what comes next?
Altshuler suggests that complacency can play a part in not being properly prepared.
“Instead of thinking, ‘That could never happen,’ think ‘Well, that could happen, so how do we deal with it? Is it feasible?’” he said. “Is there enough benefit in the cost of preparing for risk? How do we assess the likelihood of risk?”
Planning for risks is an essential component of real estate, and having an internal committee brainstorming the “what-ifs” and how to respond to them is key to staying on top of risk management and protecting property from the unknown. That unknown could be anything from a cyberattack to a blackout or even a riot.
According to Freundlich, people are “always thinking about risk management.
“We’re thinking about insurance. We’re thinking about how we can be healthier. With risk management, you need a good group of advisors to deal with these issues.”
Looking at different scenarios to see what weaknesses there may be in risk management systems is an important aspect of the real estate business, and getting advice from experts is always a good place to begin.