In the automotive world, a “lemon” is a car that looks fine on the outside but hides serious defects. The same idea applies to climate risk in real estate. A building may look great from the curb today, but will it hold up when extreme weather hits?
Financial Risks
The challenge is that the vulnerabilities aren’t always visible. Many buildings were designed for a climate that no longer exists. They are under-engineered for the realities of today: extreme heat, intense storms, flooding, and chronic stresses that accelerate wear. Often, those weaknesses lie deep within mechanical systems, building envelopes, or site infrastructure.
These “climate lemons” carry real financial risk. Performance declines, operating costs rise, and asset value can erode. Insurance premiums climb, capital expenses appear unexpectedly, and maintenance budgets balloon. Tenants notice, and investors are increasingly steering clear of assets that aren’t climate-ready.
How To Spot a Lemon
Some warning signs are obvious—recurring system failures during heat waves, frequent flooding, or unexplained repair costs. But many remain hidden. That’s why credible Climate Value at Risk (CVaR) assessments, those that model climate hazards against specific building systems and express the results in dollars are essential. They help reveal where the risks truly lie and what they will cost.
At ClimateFirst Building Solutions, we sometimes extend the “lemon” analogy: when life gives you lemons, make lemonade. That’s exactly what our upgraded Resiliency Plans are designed to do. With science-based adaptation measures linked to each hazard, they help owners and operators make informed, cost-effective decisions to extend a building’s useful life and protect long-term value.
Whether driven by capital planning, due diligence, acquisitions, reporting, or compliance, the benefits of climate-ready assets are clear: resilient buildings perform better operationally and financially.
Do you have a climate lemon in your portfolio? Find out and learn how to transform it into a resilient asset ready for the future.
