MIT/CRE Meet the Visionaries Repricing for the (Uncertain) Future: Real Estate, Property Value, and Climate
May 19, 2025
Dave Burt, Founder and CEO of DeltaTerra Capital, leads the charge in addressing climate risks in real estate. With a strong background in managing macro portfolios, he offers sharp insights on how climate change is reshaping property values and investment strategies. Burt discusses the critical need for updated risk models, especially in light of increasing weather disruptions. He also sheds light on misconceptions in mortgage markets, highlighting disparities between commercial and residential properties. Adaptation to these challenges is vital for the future of real estate.
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Delta Terra's Origin Story
- Dave Burt shared the origin of Delta Terra Capital from his deep research into securitized mortgage credit markets since 1997.
- He described how early climate risk data from 2015 shifted his focus to climate-related mispricing in real estate markets.
Insurance Masks Climate Risk
- Insurance historically failed to price climate-related catastrophe risk adequately, keeping property values stable post-events.
- Government assistance and static insurance costs masked growing long-term property liabilities until recently.
Insurance Market Under Stress
- Insurance is a risk transfer tool pooling many risks, but rising climate hazards have overstretched its capacity.
- NFIP reforms and wildfire losses are driving insurance markets to finally address true climate risk.