Vacant Buildings Increase Due to Pandemic
The U.S. has seen a lot of changes over the past year; however, one industry was shuttered in a unique way: the commercial real estate market. Businesses like retail stores, restaurants, hospitality locations and offices have either closed or moved to a home-based model, leaving a sea of vacant commercial spaces.
According to Risk and Insurance magazine, U.S. vacancy rates grew to 20% in the second quarter of 2020, and, in the office sector, to an average of 15%. A quick rise in vacancies of this magnitude will no doubt leave a bruise on the commercial real estate sector for some time to come. Many professionals in the sector do not foresee the industry bouncing back until 2022 (Bloomberg).
With many vacant properties sitting for so long, it’s important to consider potential risks. For example, vacant buildings present challenges for their owners, whether it be fire, bursting pipes, windstorms or even vandals. This raises the question: How do we make sure these vacant buildings are protected?
The Devon Park Specialty and USLI Vacant Building product can provide property owners with the coverage they need to protect their vacant property assets. For these accounts, we can provide liability coverage on buildings up to 500,000 square feet and property coverage up to $5 million in total insured value per location. We have no restrictions on the length of vacancy and can include business personal property coverage, if needed. We can also provide theft of copper coverage on buildings less than 25 years old with our Special Coverage Form.
As states lift restrictions and businesses prepare to open their doors, the need for building renovations will increase. We can write accounts with up to $5 million in renovation projects, and we have the ability to provide independent contractors coverage. We offer flexible policy terms of 3, 6, 9 or 12 months, and we also provide the ability to extend the policy term in case renovations take longer than expected or the property has not yet sold.
Contact your Commercial Lines underwriter to learn more about our Vacant Building product.
As always, thank you for your support and business.
Contact Michelle Ralston
Second Vice President, Team Leader | 888-523-5545, ext. 2015
Written by Bob Kane
June 3, 2021