And that doesn’t include man-made disasters, such as the Gulf Oil Spill, which has damaged miles of coastline and caused trepidation amongst both the residents of beachfront apartments and condos and the owners of the properties. (Jacksonville, Fla.-based The St. Joe Co. became the first owner to file suit against BP this summer in an effort to protect its land and properties in the Florida Panhandle.)
Most companies operating in disaster-prone areas such as the Gulf Coast or the Midwest have plans in place for natural disasters. But how often do they look closely at it or train employees and residents on how to execute those plans? Many companies also neglect to consider how to operate in the face of power outages or a lack of cell or landline telephone service.
By the Numbers
9.9%
National unemployment rate in April 2010 (the year-to-date high), compared to a five-year high of 10.1% (October 2009) and a five-year low of 4.8% (February 2006)
Source: Bureau of Labor Statistics
22%
Decline of the value of the U.S. dollar in 2009
Source: Association of Foreign Investors in Real Estate
$26.4 billion
Arizona’s total expected expenditures to remove all undocumented workers
Source: The Peymen Group
460,000
Approximate number of undocumented immigrants living in Arizona
Source: Center for American Progress
$236.40
Average per-unit insurance premium across the five main Gulf States (Alabama, Florida, Louisiana, Mississippi, and Texas)
Source: Insure.com
1.2%
Inflation rate in 2010 (vs. 3.4% in 2000)
Source: U.S. Inflation Calculator
—Data compiled by Laura McKenzie
AKAM, a Boca Raton, Fla.-based residential property management company with 30,000 units, deals with hurricanes regularly. The company requires each property to develop its own hurricane plan. As a part of the procedure, senior management staff takes responsibility for one area—operations, mechanical, and so on. “While it might seem cumbersome because the building manager has to deal with different executives, they’re working with the best and most knowledgeable in that particular area on each building,” explains chairman and CEO Leslie Kaminoff.
Property staff also looks at the demographics of each building and plans for residents with special needs. And each resident must complete a form with information on medications taken, mobility issues, and even next of kin. They’re also given a notebook outlining their building’s disaster plan.
AKAM trains on-site workers hard so they know how to execute the plan, even if there’s no phone or power. “It runs automatically without communication. There are meetings and run-throughs regularly to make sure everyone’s up to speed. The plan and procedures are reviewed with residents in group meetings and one-on-one discussions with property managers.”
If you operate in an area prone to natural disasters, you may also have to compete for contractors if there’s widespread damage. That’s not something that usually shows up in contingency plans. When there’s plenty of work to go around, owners who have to wait on bids for repairs can be stuck. To counteract this, establish priority service agreements with key vendors ahead of time. This enables you to lock-in contractors, roofers, electricians, and other skilled tradesmen before you need them.
AKAM’s Kaminoff sums it up: “Don’t take any threat lightly. It could be one in a million, but if you’re that one company affected—and someone always is—you need to be ready.”
Margot Carmichael Lester is a freelance real estate writer based in North Carolina.