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Case Studies

Development Consulting Saves More than $1M of Property Value for a Mixed-Use Development Project

A regional real estate developer was unable to close on a construction loan for a mixed use development project located within a FEMA-designated Special Flood Hazard Area (SFHA) in California. At the last minute, the lender identified that the building is within a SFHA and required the developer to factor into his financial projections the purchase NFIP flood insurance during construction. The capitalized value of the NFIP premium was going to prevent the developer from obtaining the loan and moving forward with the project. Our client, a super-regional insurance agency, asked us to review the building plans to figure out whether or not any changes could be made that would make the building eligible to be reclassified out of the SFHA to eliminate the need for NFIP flood insurance during and after construction, so their client would be able to secure the construction loan and move forward with the development project.


Our highly specialized flood consulting team, comprised of water resource engineers, surveyors and certified floodplain managers, worked in conjunction with the developer and its local design team to assess the situation and develop a solution. Our team provided development consulting recommendations for altering the plans to create a building that would be considered more “flood safe” according to FEMA’s rules and regulations. The result is a building that will qualify for removal from the SFHA upon completion of construction while remaining within the development budget. Our engineers obtained a Conditional Letter Of Map Revision (CLOMR) from FEMA indicating that the building will be eligible for removal from the SFHA upon completion of construction; provided, the develop builds it according to the plans.


Our team was able to get the lender to recognize the CLOMR and eliminate the NFIP flood insurance requirement during construction. The outcome was no change to the original development budget, which allowed the developer to obtain the construction loan and move forward with the project. Our industry leading flood expertise helped the developer:

  • Design a building with far less flood risk.
  • Eliminate the lender’s flood insurance requirement.
  • Prevent the developer from spending more than $50,000 on NFIP flood insurance premiums.
  • Save more than $1 million of property value by preventing the NFIP flood insurance expense.

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Flood Zone Correction Reduces a REIT’s Annual Flood Insurance Costs by $103k


Our client, a national broker, asked us to help them reduce flood insurance costs for one of their clients – a large REIT with 16 properties in its portfolio that standard flood zone determinations indicated to be within FEMA-designated Special Flood Hazard Areas (SFHA), which include flood zones beginning with letters A or V.


We performed a thorough flood risk analysis and found that 11 properties were not at high risk of flooding during 100-year flood events. Therefore, they had been wrongly included in the SFHA. We worked with FEMA to successfully remove these properties from the high-risk flood zones and to reclassify them into the correct low-risk flood zones, where they should have been in the first place.


  • 70% of the properties were removed from the SFHA (11 out of 16)
  • $103,000 reduction in annual flood insurance costs
  •  $1.47 million increase in property values, based on the application of a 7% capitalization rate


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Correcting NFIP Rating Errors Reduces Premiums by 75%

Our client, a super-regional insurance agency, asked us to help them find a way to reduce the NFIP flood insurance premiums for one of their new clients – a large commercial real estate company that owned a single structure multi-tenant retail plaza. The property was insured with six different NFIP flood policies representing total premiums of $24,648 for this one structure, which were written by the prior insurance agent.


We used our unique, research-driven underwriting process to procure documentation which identified that there were two rating errors in this situation. First, in accordance with NFIP rules and regulations, there should have been only one policy for this structure based on its construction specifications. Second, the prior insurance agent used inaccurate rating information to calculate premium, which resulted in artificially inflated premiums. By leveraging our flood expertise, we delivered substantial future savings, captured a large insurance refund, and increased property values.


  • $100,000 insurance refund from eliminating the duplicate policies
  • $23,966 (75%) reduction in the total annual flood premiums
  • $340,000 increase in property value, based on the application of a 7% capitalization rate

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