'I May Go Months Before I See Another African American In My Industry': Black Execs On Lack Of Diversity In Houston CRE
When Ed Nwokedi first started in the real estate industry, he set up a meeting with a white client.
“I walked with my hand out to shake the guy's hand — and I'll never forget this day — he walked right by my handshake and ignored it, and steered straight to my boss and shook his hand and engaged in conversation as if I wasn't even in the room,” Nwokedi said.
“I'm the person who communicated with them to set up the meeting, to come in and meet with them. But even though he knew my name, visually, he saw me and he saw my boss, he went straight to my boss and had the conversation and totally ignored me.”
It was a formative experience. After that day, Nwokedi found it was easier to conduct business over the phone and receive financial commitments without face-to-face interaction. When a deal reached the point of signing, clients were more likely to move forward, because there was an economic advantage.
Nwokedi operated that way for years, building up a reputation for being successful so he could be seen as an expert rather than just a black man. After gaining experience working for Colliers International and Cushman & Wakefield, Nwokedi started his own firm, RedSwan, in 2018.
But the death of Houston native George Floyd May 25 after being arrested by police outside of a deli in Minneapolis has offered a chilling reminder that many people in America see the color of his skin, not his accomplishments – and that can be dangerous.
“As a black man, I'm always worried that I can be pulled over, and anything can happen, even to an educated, successful [person] — to some people, I'm just the same as Floyd,” Nwokedi said.
For members of the black community who work in Houston’s CRE sector, Floyd’s death is a reminder of the real threats facing people of color on a daily basis.
“I started to think about the men in my life whose lives are so invaluable and meaningful, and that it could have been any one of them,” a black public administrator who works with the commercial real estate industry said.
“What's really frustrating is that I felt a sense of helplessness. I'm seeing this, and I'm thinking, what can I do? I wish I could just stop it in the moment,” the administrator said.
“Anger and disbelief is a mild description of what I felt.”
The incident has also made much of the country reassess racial equity in general. Despite Houston’s diverse reputation, the commercial real estate sector continues to skew white. Those who spoke to Bisnow all said they don’t know many other black people actively working in the industry.
“There's not that many of us in the industry, and when we are in the industry, we're kind of in silos,” Nwokedi said. “I may go months before I see another African American in my industry.”
The public administrator said that in their current role, they have worked directly with only seven developers who are African American or non-white.
“Even when there was an African American developer that was part of the transaction, it was not frequent that the African American developer was the lead developer. Often, he was maybe part of a team,” they said.
“I think we have to look at the pathways into commercial real estate. The question is, how do we attract people into commercial real estate, and are those opportunities easily accessible by people of color?”
The current pathways don’t include much in the way of diverse local professional organizations. One of the more well-known groups is the Houston Black Real Estate Association, which primarily represents people working on the residential side of real estate.
Without a large-enough mass of black commercial real estate professionals, there is limited benefit in establishing a professional organization. Guess Group President John Guess III said for those on the commercial side of the business, there was little choice but to join national, majority-white groups to network, stay informed and take advantage of new developments in the industry.
Guess said that for him, there were advantages to working for a powerful company like Shell Oil Co. in the early days of his career. Because Shell was making large real estate investments in Houston at that time, Guess was afforded more respect than some of his peers.
“All of a sudden, the color of my skin didn't matter, because I was delivering the big checks,” Guess said.
That respect carried over into his career at the city of Houston. Major developments had to go through the real estate department, where Guess ultimately served as director. The relationships that came out of that role allowed Guess to found his own company, Guess Group, which has been in operation for more than 33 years.
“When I came out, they knew me. It wasn't like somebody shows up that didn't have a track record that they could reference,” Guess said.
“My track, while difficult, showed that if you know someone personally, it makes a difference when you get ready to do a deal.”
Playing in capital markets and hard assets allows for big returns, but in many cases is inaccessible to newcomers who don’t have existing wealth or connections in the sector.
“It's a club. It's an exclusive club. I'm happy to be a part of it, and the whole reason I became a part of it [is] because I was educated to the point where I can successfully add value to their profitability, so therefore that puts me in the business and being accepted,” Nwokedi said.
“But by no means am I on the equity side of the equation, I'm on the service side of the equation. I'm not the one that they're partnering with to buy real estate, I'm the one they're hiring to help them buy real estate and therefore taking on a fee for my service.”
“I'm not one of the family who's actually being part of the principals that are buying and growing and becoming millionaires and billionaires.”
There are similar barriers to get into real estate development. The ability to secure funding in this industry can be a particular challenge to people of color, who may not have the same access and relationships that other industry participants have.
“When we talk about the divide, it's the lack of access to capital,” the public administrator said.
Guess described the commercial real estate industry as a “cloud floating well over mainstream America,” which doesn’t tend to interface with regular people. But that makes it all the more important for the black community to enter the sector and help other people of color invest.
“I chose this because I feel that we do need to be a force in the commercial real estate industry, we need to be there to support our professionals that want to do investing in this country,” Guess said.
This conversation has been ongoing for generations, but Guess and Nwokedi said there is something in this moment that is different and could spur change.
Large-scale protests have continued for more than a week in major cities around the U.S., calling for harsher charges against the police, further arrests and a need for broad, systematic change. Daily protests in Houston have illustrated the frustration of many in the city who feel that change is overdue.
An organized protest march was held in Downtown Houston on June 2 to honor Floyd, led by members of his family, Mayor Sylvester Turner and several celebrity figures. More than 60,000 people participated in the protest, a scale not typically seen in the city.
Nwokedi noted that the size of the protests is a reflection of just how frustrated and angry people are about ongoing police brutality, racism and the disadvantaged position the black community has endured for a long time.
“I do think that what's happening, the protesting taking place, we've seen this before, but this time it seems to be a little bit more sensitive, because I think people are just kind of sick and tired, and are desperate to find change, desperate to be heard, and that's why this protest is so large.”
Guess participated in the U.S. civil rights movement in the late 1960s, while also launching his career in commercial real estate. He said he is supportive of the protests happening today, and said the people taking part are far more diverse than in the past, thanks to technology boosting awareness of these issues.
“I think a lot of things have been brought to the forefront, that we sort of just brushed aside and then the establishment refused to deal with the situation,” Guess said.
“I'm looking at this mixture of individuals now in the street, and I think that is going to make a much different impact on how fast we see social change for the better in this country, because politicians pay close attention to what the electorate is doing, and seeing what moves them.”