On September 26, 2024, Hurricane Helene slammed into the Southeast, leaving a path of devastation that will undoubtedly have long-term consequences for communities from Florida’s Big Bend Region to Tennessee. With a death toll of more than 200 (and hundreds still missing), Helene is now the deadliest hurricane to make U.S. mainland landfall since Katrina in 2005.
As rebuilding efforts are only just beginning, knowing the full scale of the physical damage to property is weeks—possibly months—away. The total financial cost of Helene is estimated at $250 billion with a massive rebuilding of homes, commercial buildings, roads, and infrastructure. Recovery for some of these communities is expected to take years. LightBox analysts took a closer look at the regions impacted by the storm and applied LightBox data to get a picture of the potential rebuilding challenge ahead.
Widespread Physical Damage to Infrastructure and Commercial Properties
Hurricane Helene made landfall on Florida’s Gulf Coast with Category 4 strength, bringing sustained winds of over 140 mph and significant flooding brought by an 8-foot storm surge. Tampa and surrounding communities bore the brunt of the storm’s severity before the storm turned inland and north through Georgia, western North Carolina, Tennessee, and Virginia. Even in the regions where Helene was downgraded to a Category 2 and eventually a tropical storm, “staggering” amounts of rain led to catastrophic flooding in areas not normally impacted by hurricane-force winds and flooding. Officials are still assessing the totality of the damage, but according to LightBox data, tens of millions of square feet of commercial real estate (CRE) properties were within affected areas, with very early estimates suggesting that 20% of these properties may have experienced structural damage.
While the scope of the damage, which spanned counties across six states designated as disasters by FEMA is still unfolding, the LightBox team focused on five urban locations that were along the path of the hurricane. For CRE properties and infrastructure, financial losses are estimated based on structural damage, interior elements (plumbing, electrical), land and erosion impact, and the loss of business equipment and inventory.
- Tampa Bay, FL:
The estimated damage to Tampa is significant with reports indicating the storm caused more than $1.5-$2 billion in damage to commercial properties. Additionally, tens of thousands of residential homes were wiped out in the storm. The coastal areas, particularly Pinellas County, experienced widespread flooding that contributed heavily to losses that submerged ground floors and caused structural water damage. Flooding and storm surges were the primary sources of damage, affecting offices, retail properties, and industrial warehouses. - Asheville, NC:
This town in western North Carolina’s Blue Ridge Mountains with an expanded metro population of about 400,000, has gained media attention for the catastrophic devastation caused by torrential rains that made local rivers rise more than 25 feet. Rescue and relief efforts for residents are still ongoing with the overall damage to the area characterized as ‘extensive.’
The cost of the damage is still difficult to gauge due to the loss of critical infrastructure, including electrical, cellular, and other communications services. Multiple downed trees damaged structures and blocked local roads. Heavy flooding caused buildings and bridges to wash away, damaged water systems, and created landslides cutting off access to several major interstates leaving the area completely isolated. The flooding severely impacted downtown and Biltmore Village (adjacent to the famous Biltmore Estate), submerging retail shops and offices. A nearby energy substation along the Swannanoa River must be completely torn down and rebuilt. Roof damage and wind-driven rain affected many properties. Entire properties were destroyed by surging water. And even more properties have significant structural damage that will result in extensive repair costs and disrupted business operations, particularly in historic areas. Officials estimate recovery could take years. - Augusta, GA:
A week after Helene hit this town along the Georgia-South Carolina border, citizens remained without power and water. Helene destroyed most of the power grid in the region. Additionally, wind toppled trees onto properties causing roof and structural damage. The damage was particularly severe in some areas, where infrastructure was overwhelmed. Augusta National Golf Club, home to the Masters Tournament, also reported damage and is still assessing its impact. Estimates suggest that recovery will take time and effort, with a focus on restoring water and power. - Atlanta, GA:
The city saw record rainfall of 11 inches in 48 hours, leading to street flooding and downed trees, causing structural and infrastructure damage. Roughly 10-15% of CRE properties were reportedly affected by the storm. While the wind damage in Atlanta was less severe compared to other areas in the storm’s path, the city did experience flooding, particularly impacting industrial and warehouse spaces. Office and retail properties in flood-prone areas also sustained damage. - Columbia, SC:
The town, both the state’s capital and home to the University of South Carolina, was at the hurricane’s outer bands and weathered rainfall amounting to 8-10 inches during the storm. Parts of the state experienced tornadoes and severe flooding, leading to downed power lines and widespread wind damage. Fallen trees added to the strain on major infrastructure, resulting in significant power outages and disruptions across the city.
The Cost to Rebuild: A Looming Challenge
The financial cost of rebuilding the damaged infrastructure and commercial properties is expected to be staggering. Preliminary estimates from industry experts place the overall damage to commercial properties at more than $35 billion, with a large portion of that attributed to rebuilding costs. The cost to rebuild in flood-prone areas often includes the expenses related to flood mitigation strategies. These may involve elevating structures, reinforcing foundations, and installing flood barriers.
Isn’t Insurance Covering the Cost?
CRE owners are generally not required to have flood insurance unless the property is in a designated flood zone and has a mortgage from a federally regulated or insured lender. In these cases, the lender will typically require flood insurance as part of the mortgage agreement to protect the value of the property.
Head of Lender Strategy at LightBox, Candi Coleman, noted that, “In most cases, damage from wind is covered, as is damage from wind-driven rain. However, flooding and storm surge, which are likely responsible for most of the damage in this case, are excluded.” Coleman also highlighted that buildings retrofitted with upgraded building standards tend to experience less damage from wind and wind-driven rain due to their ability to withstand higher winds.
However, she pointed out, “The current levels of unexpected flooding due to factors such as dated flood maps and unprecedented storms will cause significant flood damage that cannot be mitigated. In some markets, such as Florida, where insurance is difficult and more expensive to obtain, some owners are either not carrying adequate insurance or they may be underinsured.”
The Economic Ripple Effect
In addition to the direct damage to buildings, CRE investors, owners and tenants face indirect costs. Business interruption to income-generating operations impacts cashflows. Retail and hospitality sectors, which rely on foot traffic and tourism, have seen a sharp decline in revenues as many properties remain uninhabitable. Insurance claims and assistance (where applicable), may take months to process, further delaying repairs and business reopening efforts.
With extended vacancies and prolonged declines in net operating income, owners may throw in the towel or relocate rather than rebuild and face future environmental risk, higher insurance costs, or financial strain like delinquencies or default. The net of that happening at a certain scale drags down property values and the attractiveness of the market for other investors— except those looking for an opportunity.
Additionally, in any rebuild effort, avoiding other hazards becomes another consideration. LightBox EDR has assisted with assessments of environmental hazards in the wake of major hurricanes like Katrina and Sandy to identify sites with known contamination or used to store hazardous materials (e.g., leaking underground storage tanks, treatment/storage facilities, Superfund sites, etc.). Floodwater from extreme events like Hurricane Helene have the potential to disturb contaminated soil or compromise hazardous waste storage facilities. It is critical that recovery efforts consider sources of known contamination or hazardous waste storage in assessing damage to minimize the impact on public health and the environment. Any cleanup or environmental remediation required is often an unforeseen cost to communities.
Rebuilding a Resilient Infrastructure to Mitigate Future Risk
When communities like those in the path of Helene’s destruction begin rebuilding efforts, considering potential future risks like floods and other hazards will be critical. Inland areas like the ones hit hard by Helene, will need to rebuild their infrastructures and properties to avoid or withstand climate events similar to the way coastal cities are adapting to environmental risk.
National attention has turned to the devastation in western North Carolina, particularly Asheville. Asheville’s flood zones, which are designated by FEMA, are concentrated along the city’s major rivers French Broad and Swannanoa. For example, the French Broad River has flood zones based on the river’s historical flood patterns and are categorized into different risk levels, such as:
- 100-year floodplain (Zone AE): This is the area with a 1% annual chance of flooding. Properties located in this zone are at a higher risk, and flood insurance is often required for properties with federally backed mortgages.
- 500-year floodplain (Zone X): This area has a lower risk, with a 0.2% annual chance of flooding. Flood insurance may not be required but is still advisable in some cases.
Extended Flood Risk Overview
| City | Flood-Prone Areas | Estimated Damage Risks | Rebuild Costs |
|---|---|---|---|
| Atlanta, GA | Peachtree Creek Watershed, Buckhead, Midtown, West Atlanta | Moderate to high, with increased costs in dense urban areas | Significant due to real estate values and code compliance |
| Tampa, FL | South Tampa, Downtown Tampa, Hillsborough Bay | High, especially in coastal zones vulnerable to storm surges | High due to floodproofing and storm-resistant building requirements |
| Augusta, GA | Downtown Augusta, Butler Creek, Rae’s Creek | Moderate to high, particularly near the Savannah River | Moderate, but higher near river areas needing erosion control |
| Columbia, SC | Congaree and Broad Rivers, West Columbia, Gills Creek | High, with significant flash flood risks during rain events | Moderate to high, depending on proximity to rivers and mitigation needs |
| Asheville, NC | Biltmore Village, West Asheville, River Arts District | High in river-adjacent areas, with moderate costs elsewhere | Moderate to high, with higher costs for floodproofing in vulnerable areas |
As some environmental experts are pointing out, disclosure about the potential hazards enable communities to adapt their infrastructure to either avoid or better withstand known hazards. As climate events continue to increase in frequency and intensity, governments rebuilding infrastructure and CRE practitioners will need to rely on tools like flood maps and wind risk models to better understand long-term vulnerabilities and mitigate future losses.
A Long Road Ahead
While the damage caused by Hurricane Helene is significant with billions in damage and long-term implications for property owners, investors, and tenants, the CRE sector has always shown itself to be a resilient industry. Time will reveal the total scope of the damage and the actual cost of rebuilding.
LightBox will continue to provide real-time data and analytics to guide the recovery and rebuilding process, helping individuals make informed decisions to rebuild stronger, more resilient communities for the future.
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