The Innovators: BentallGreenOak’s Sonny Kalsi
In this series, Bisnow highlights people and companies pushing the commercial real estate industry forward in myriad ways. Click here to read Q&As with all the innovators Bisnow has interviewed so far.
There has been a lot of talk about diversity and tackling discrimination in commercial real estate over the past year. But tangible action, with targets that can be measured, assessed and judged a success or failure? Not so much.
After the tumultuous events of last summer, BentallGreenOak Chief Executive Sonny Kalsi knew he had to do more. And so he led an initiative to put in place a target at the $62B global investment manager in which two-thirds of new hires had to be minorities or women. He and the firm’s senior management team wanted to ensure that BentallGreenOak is not the typical majority male and White real estate firm, but is reflective of society more broadly.
The new policy is still in its early stages, and the baseline from which BGO is looking to diversify is still being ascertained. But Kalsi and the firm have committed that if targets are missed, money will be taken from the bonus pool and reattributed to causes the company already supports that promote diversity and inclusion. Having a hiring policy with a set target aimed at improving diversity and inclusion is rare in real estate, and that policy being public is even rarer.
Kalsi talked Bisnow through the initiative: how and why it came about, how it works in practice, the challenges and successes so far, the disappointments and how, if you want to improve diversity but don’t know what to do about it, you should just get started.
This interview has been edited and condensed for clarity.
Bisnow: Talk through why you decided to put in place a new hiring target.
Kalsi: Diversity is something I’ve been focused on. I was born in the UK; my parents emigrated to London from India when my dad did a Ph.D. at Imperial College. I don’t know if he was banking on me coming along, so three years later they moved. I was a Brown guy growing up in Tennessee in the 1970s, and I didn’t face the same discrimination as my Black friends, but you heard the N-word. I came to Wall Street and started working there in 1990. Someone asked me recently, do I feel I’ve ever been discriminated against in my career? I’m a positive person, but I would say I had to work harder to get to the same place, to get the same opportunities other people had.
A couple of years ago, pre-pandemic, I became involved with a group of institutional investors and started championing diversity in the industry alongside them. We created an internship for Black and Hispanic kids and created a real estate program for minorities as well. And it was great doing this from an industry perspective, but what about the firm I built and led?
Then the pandemic happens, and then George Floyd gets murdered on TV. People have been asking me, are you watching the trial — I don’t need to, I watched him get murdered on TV. You saw the protests happen, I think the pandemic and the disruption it caused meant that people’s disillusionment and frustration boiled over. And I just looked at that and thought, well shame on me for not doing more. I feel like there’s more I could have been doing to play my part. And the biggest thing I can influence is the company I’m CEO of.
We at BentallGreenOak are the product of a merger that happened about two years ago. Bentall Kennedy has been a long-term leader in the E part of ESG [environmental, social and corporate governance]. When we merged, they asked me to run the company, and I have the benefit of merging with a firm that is a leader in sustainability.
We were pretty diversified pre-merger; 40% of our staff were White males, which meant 60% weren’t. It’s not like we had quotas, it just happened. Two of our three founders are Asian Americans.
At GreenOak we had 100 employees, at Bentall Kennedy there are 1,300. So putting them together, what is something we can intelligently do to move the ball? Something that people can look at from the outside and, in the best case, emulate?
Bisnow: How did you come up with the figure of two-thirds of new hires being minorities or women?
Kalsi: When I told one person what I was planning they said, that’s really revolutionary. I said no, it’s just math. The world is 50% female, and the U.S. is 40% minority. So if you look at the math, that means more than two-thirds of the population are going to be women or minorities. I’m not trying to be heroic, it's just math.
But real estate, and to some degree finance more broadly, has not historically reflected the broader population. It’s disproportionately White and male. I can’t tell you how many times I’ve heard people say, I would love to hire a more diverse group of people, but I can’t find the candidates. And it becomes a self-fulfilling prophecy. But if you don’t ask your team to suggest diverse candidates or push recruiters to bring you a broader range of candidates, you will be stuck in an endless cycle.
I talked to the rest of the senior management team, many of whom are White males, and said, I think we should start this in two weeks. And people thought it was awesome, it’s really cool. Everyone has friends, a mom, a spouse, a daughter. It is not a stretch to understand why we should be doing this.
Bisnow: What are the challenges with introducing a target such as this? And how is it going so far?
Kalsi: There are a lot of challenges with this, starting with the business plan and understanding where we are now. One of the challenges is Canada [where 800 of the company’s employees are located]. In the U.S. you can easily collect data on the race of your employees, in Canada the law is different and it is not so easy. So we are having to go out and do the work to figure out where we’re starting from, so that we can know how we’re doing. What I can say is that so far we’ve hired more than 100 people this year, and we’re well above that two-thirds figure, but I can’t say exactly what we’ve done because we’re still collecting that data. What I want to be able to do is to say, here’s where we started, and here’s what we’ve done.
Bisnow: What are the practical steps you’ve taken to make sure you hit your target?
Kalsi: In terms of what we have to do to meet those targets, we are pushing forward champions of diversity and our internal education programs. It’s about working with executive search firms that understand what we’re doing; about asking our diverse teams about their own networks, do you have friends in the industry; or working with service providers who have created diverse teams themselves. And we think the message has got out around the world about what we are looking for. We’ve given the wider team time to get their head around it and understand it.
Bisnow: How did you make sure this didn’t just seem to the wider staff like a top-down edict from senior management?
Kalsi: We hired a couple of outside firms to work with us on equality and diversity and inclusion strategies. It’s always good to work with experts, and we wanted to work with them to work out how to get the message out there to the team. We’ve created a bunch of internal affinity groups that were open to anyone to join, not just if that group represented you or for diverse employees. People have shared stories, around Pride Month or Black History, and the whole process has shown how important this is to all of our employees.
Bisnow: Have there been any disappointments?
Kalsi: One disappointing thing is that we haven’t seen anyone else doing this. No one has said they will do something similar publicly, but I haven’t even heard in private of anyone doing anything similar. I would have thought more people would do this. And people can take whatever approach they want. But the reason I felt putting a number on this was important is, what we do for a living is a quantitive business. I work in an office next to the Seagram building, and it makes me feel good to look at it. But an investor looks at it and asks, what’s the return on it? We're in a quantitative business. There are a lot of well-intentioned people, but if you don’t put a quantitive measure against something, it is hard to know if you’re moving the ball.
Bisnow: With that in mind, in the wake of the protests last year surrounding the killing of George Floyd, there were lots of corporates making promises to “do better” on diversity, but less evidence of tangible change. Was the sentiment being expressed just for show?
Kalsi: I’m a glass-half-full kind of a guy, and I fundamentally believe that overall the majority of people are well-intentioned. That reaction, and the statements people made, they meant it. I don’t think it was lip service. But I think people are stuck on the execution part: How do we do this, how do we push it forward? A lot of companies have been doing some real work on pay equity, putting in place real metrics around who is getting what. I’m not cynical enough to think people were trying to whitewash away what was happening, I think they are just struggling to get going. We didn’t just spend our time thinking about it, we are getting on and doing something.
The sector has done a lot on gender, but one of the big challenges we need to face is improving the number of Black hires, and looking at diversity beyond gender and at all minorities. A big focus of that needs to be on education. Education can change the outcome for an entire family; it has a huge multiplier effect. Once you’ve given someone an education then you can never take that away from them. That’s why I’ve worked on educational programs, and we’re looking to expand that.
Bisnow: What advice would you have for those companies that want to do better but are struggling with execution?
Kalsi: No. 1, just get started. Just. Get. Started. If you’re not comfortable making a big, public pronouncement, then just get going without that. Second, you have to define your metrics, and put some metrics in place of where you are and what you want to achieve, so that you can hold yourself accountable. That’s really important. Thirdly, this is bigger than any one company. Be prepared to work with others, and let’s help each other. I want more companies to be doing this. If other people come out with more ambitious goals, I’ll be really happy, because that will push us to do more.
Bisnow: Why did you decide to take money out of the bonus pool if targets weren’t hit?
Kalsi: If you have metrics and they don’t have teeth then you just say, oh well, we’ll do better next year. If we don’t hit or exceed our metrics, then we will give more to people we were going to give to anyway. It just further incentivizes us, but then we are incentivized because we think this a good thing for all of our stakeholders. For me it is just a way of showing that it is important to our organization, and it is not something we are just paying lip service to, it’s not just a black square on social media. We are holding ourselves accountable.
Bisnow: How can real estate, and society more generally, ensure that the usual cycle is broken of diversity rising up the agenda following an incident like the killing of George Floyd, only to recede in importance once the initial outrage fades?
Kalsi: It was Asian Pacific American Heritage Month recently, and we had a bunch of speakers come in and speak to the group. In the U.S. there has been a huge uptick in anti-Asian hate crimes, and that has kept the topic in focus. What was great was that when all this started last year a lot of people reached out to express their support, and that is heartwarming that there are so many allies out there. But this will stay front and center. The U.S. has so much work to do on this, and we do too as an industry. Unfortunately we know that what happened with George Floyd won’t be the end of this, as we’ve seen it happen again. So I’m not concerned about this fading away. Last November, 25% more people voted than ever before, and in no small part that is because people want change.
And on another level, as an investment manager, the ESG topic, not just diversity but ESG more broadly, is more important than it’s ever been. Our clients are more focused on it than ever, and it is not only the right thing to do, but it is good for business.