Water damage costs U.S. insurers over $10 billion annually, more than fire and theft combined. Yet the language most commercial real estate companies use in their public filings to describe water risk is cautious, general, and largely disconnected from any plan to manage it.
Wint reviewed 10-K filings from 101 property-intensive companies, including REITs, hospitality operators, construction firms, and healthcare and retail property owners. The filings span 2022 to 2024. Here is what we found.
Key findings:
- 79% of detailed filings connect water to insurance or liability
- Only 33% describe any concrete action to reduce water risk
- Just 25% quantify water losses in dollar terms
- $57M+ in quantified losses disclosed across six companies over two to three filing years, averaging $7.7 million per company
- 77 of the 101 companies appeared in the sample only because their filing contains a standard insurance clause listing plumbing as a covered peril. Beyond that clause, those filings contain no water risk program, no dollar figures, and no monitoring technology.
Methodology
All data sourced from 10-K filings submitted to SEC EDGAR between January 2022 and December 2024. 101 property-intensive companies were identified across commercial real estate, REIT, hospitality, construction, healthcare, and retail SIC codes. 24 were reviewed in full detail; the remaining 77 were identified via search term match and classified as likely boilerplate. The absence of water risk language in a filing reflects the absence of disclosure, not necessarily the absence of a program.
How Companies Talk About Water
The most common water-related language in commercial real estate 10-Ks is an insurance provision. Companies list the perils their properties are insured against, and water appears on that list alongside fire, earthquake, and terrorism. This language fulfills a disclosure requirement. It does not reflect a risk management strategy.
“Our properties are subject to losses from natural disasters including fire, earthquake, hurricane, tornado, flood, and other perils. Losses may exceed insured levels…”
The above language appears in near-identical form across dozens of filings.
The second most common form is a climate risk factor: flooding, drought, and storm intensity described as risks associated with climate change. More substantive than boilerplate, but still short of describing what the company is doing about it. Only one in three companies reviewed describes a concrete action, and fewer than that quantify losses in dollar terms.
Where the Money Shows Up
Six companies in the sample quantified water-related losses in dollar terms. The average reported loss was $7.7 million. In every case, the disclosure was triggered by a specific event: a named hurricane, a flooding incident, or ongoing litigation. None disclosed water losses as part of routine tracking.
The largest single-event losses in the sample:
- $17.5 million in catastrophic event charges from Hurricane Ian flooding at a manufactured housing and RV park REIT
- $13.6 million in goodwill impairment for a gaming operator whose hotel renovation was delayed by water damage
- $5.9 million in hotel restoration costs from Hurricane Ida across two New Orleans properties
- $6 million in casualty charges at a diversified healthcare REIT, with water damage cited as a primary driver
The $13.6 million gaming operator impairment is worth pausing on. The loss did not come from the water event itself. It came from the operational disruption: a hotel out of service longer than expected, requiring a downward revision to long-term cash flow projections. No water monitoring program is mentioned in that filing.
Insurance Is Tightening, and Companies Are Absorbing More Risk
Several companies disclosed that insurance market conditions are changing: fewer carriers offering coverage, lower limits, higher deductibles, and higher premiums. One diversified REIT is now self-insuring a larger share of its coastal exposure. Another formed a captive insurance company specifically to manage deductible risk for flood and windstorm perils.
These are financial responses to shrinking coverage. They do not reduce the underlying physical risk. For companies in that position, each water event now carries more financial exposure than it did a few years ago.
“With fewer insurers willing to provide policies, and policies increasingly including lower coverage limits, higher deductibles and higher premiums, we have changed our insurance purchasing philosophy and strategy resulting in us self-insuring a greater risk.”
Who Stands Out
Data Center REITs
The most structured water risk disclosure in the entire sample comes from data center REITs. Two of them treat water as an operational input with direct implications for uptime and cost, rather than primarily as a weather hazard. One includes a dedicated Water Management section in its 10-K, complete with usage metrics, third-party assurance, ISO certifications, and a water risk classification tool that identifies properties in high or extremely high baseline water stress. The driver is likely a combination of customer ESG requirements and the water-intensity of data center cooling.
Office and Lab REITs
One office and lab REIT provides the most operationally specific disclosure in the property category. Its 10-K describes four distinct interventions: domestic fixture upgrades, cooling tower optimizations, a leak detection program, and irrigation system retrofits, all embedded into new leases through green lease language. The disclosure sits in a risk mitigation section rather than a risk factor section, which signals the company views water management as an active response.
Hospitality
One vacation ownership operator stands apart by disclosing a formal water risk assessment conducted in 2023, which identified 53 managed resorts in high or extremely high water-stressed locations. It is the only hospitality company in the sample with a named, structured process for identifying water-stressed properties.
The Risk That Gets Less Attention
The financial attention given to named storms and flooding can obscure a more frequent category of risk: internal building failures. Plumbing failures, burst pipes, HVAC condensate issues, and sprinkler malfunctions cause water damage year-round, independent of weather. According to Chubb, the leading causes of commercial water damage claims are:
- Roof leaks: 15%
- Plumbing fixture failures: 15%
- Sprinkler failures: 14%
- Water heater malfunctions: 11%
- HVAC leaks: 8%
These events are largely preventable with monitoring. A burst pipe detected within minutes causes a fraction of the damage of one that runs for hours or days. Yet only 33% of companies reviewed describe any technology or program targeting these internal failure modes.
Questions Worth Asking
Do you know where your water risk is?
The vacation ownership operator that disclosed 53 high water-stress properties conducted a formal water risk assessment and put the result in its annual filing. Most companies in this sample have not done this, at least in any form they have made public. Publicly available tools can classify properties by watershed stress, flood zone, and regulatory water use constraints. The constraint is usually organizational: no one has been assigned to do it, or the output has not been connected to asset management decisions.
What happens when insurance tightens further?
As insurance becomes less available or more expensive for specific perils and geographies, the financial consequence of each water event increases. Companies that have reduced their underlying risk profile are better positioned than those that have only adjusted their insurance purchasing strategy.
What does a leak cost before you detect it?
The $13.6 million gaming operator impairment is a useful benchmark. That figure represents the financial consequence of operational disruption, not the repair cost alone. The longer a water event goes undetected, the larger that figure becomes. Two thirds of the companies reviewed in full detail disclose no program to detect or reduce water events before they become losses.
