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85% Of Leaders Are White At The Finance Giants That Bankroll Commercial Real Estate

This is the third installment in Bisnow's series examining the racial diversity of the boards and executive leadership of the biggest companies in commercial real estate. To read the introductory editor’s note for this series, click here. To read Part 1, on REITs, click here. To read Part 2, on commercial brokerages, click here. To read Part 4, on developers, click here.

With trillions of dollars at their disposal, the banks, life insurance companies, pension funds and private equity investors that make up the commercial real estate finance industry, perhaps more than any other, determine which communities get investment and which don’t. 

Their blockbuster deals grab headlines foretelling economic prosperity across American suburbs, towns, cities and neighborhoods — but all too often, those dollars do not flow toward communities of color. The titans of the finance industry are community kingmakers, and they are managed mostly by White men.

Out of every 20 executives at the two dozen biggest funders of commercial real estate, 17 are White, according to a Bisnow analysis of their leadership.


Most of these businesses have made commitments that they are working diligently to diversify — especially this summer, when police killings of Black people sparked a nationwide outcry.

“The events of the past week have created a sense of true urgency that has arisen across our nation, particularly in view of the racial injustices we have seen in the communities where we work and live,” Bank of America CEO Brian Moynihan said in a statement June 2. “We all need to do more.”

In an effort to document how the commercial real estate finance industry is upholding those promises, Bisnow sought to learn the racial and gender diversity in the C-suites and on the boards of two dozen of the country’s largest CRE investment, asset management and mortgage lending companies over five months. 

Combined, the 24 companies control over $15 trillion in assets or loans, several trillion dollars of which are held or backed by commercial real estate. 

These companies, including banking giants like JPMorgan Chase, Goldman Sachs and Wells Fargo, institutional investors like Nuveen, Clarion Partners and MetLife and private equity firms like Blackstone, Brookfield and Starwood, employ more than 1 million people between them. 

Bisnow found that almost all had boardrooms and executive teams in which people of color made up less than one-third of the total group. Out of 410 C-suite or other top leadership positions across the 24 companies, roughly 15% are filled by people of color. Out of 278 board or other governing positions for these companies, 56 are occupied by people of color, or about 20%.

“To honor the legacies of George Floyd, Breonna Taylor and Ahmaud Arbery, we must all commit to help address the damage of generations of racism,” Goldman Sachs Chairman and CEO David Solomon said in a June 3 statement announcing the investment bank would establish a $10M fund to “help address racial and economic injustice.”

When Bisnow asked these companies what plans they have implemented to diversify their company, most responded that they planned to target entry-level positions. Far fewer say they are looking to immediately add diversity at the leadership levels, insisting the issue is with developing talent, rather than elevating it.

“I'm always amazed when people say, ‘I can't find diverse talent,’ because I don't really have a problem finding it,” Leslie Hale, the CEO of hotel REIT RLJ Lodging Trust said, speaking on a webinar hosted by CRE finance company Walker & Dunlop over the summer. “You need to look beyond your own network, and you have to be willing to give somebody a shot who doesn't fit the box perfectly.”

Wells Fargo, JPMorgan and Bank of America, the country’s three largest commercial real estate lenders, have multifamily loan portfolios combining for about $280B. MetLife, PGIM and Nuveen invest life insurance premiums and teacher pensions into commercial real estate to the tune of more than $100B each, including hundreds of thousands of homes combined. 

That gives these giants unique potential to reverse some of the social costs of discriminatory acts like redlining.

The biggest commercial banks “have an affirmative responsibility to address economic inequalities and those of opportunity,” UCLA Richard S. Ziman Center for Real Estate Director Stuart Gabriel said. 

To this day, many of the country’s biggest banks still regularly face accusations of discriminatory hiring and lending. 

“Their role should not be underplayed or underestimated,” Gabriel said. 


Critics tie a lack of diversity within the upper ranks of commercial real estate’s biggest lenders to a lack of opportunity for developers of color and a dearth of much-needed economic development in underserved communities. 

Existing networks among leaders in CRE finance tend to exclude developers of color and shun community-minded projects, according to Diane Borradaile, chief lending officer of national CDFI Capital Impact Partners and a former senior vice president at Bank of America.

“Lending is done very much on a relationship basis. It can be as simple as people who know one another, but it can also be the distribution areas such as referral from banks, bankers, referrals for brokers, so on and so forth,” Borradaile said. “And those really revolve around relationships that developers of color often lack, particularly if they are focused on markets that are not well-served by those outlets to begin with.”

Finance and lending is often the part of the commercial real estate industry people of color have the most interest in entering, said Lamont Blackstone, chairman of Project REAP, which connects minority candidates with CRE companies. He said it has been difficult to find roles for his program’s alumni at those firms, which he said are very selective and often focus only on entry-level hiring. 

“It should be possible, if an organization is intentional with regards to how they cultivate talent, to take in bright folks who may not necessarily have any prior real estate background but have other interesting skill sets that, if given the opportunity and molded correctly, can transform into a real added value for hiring organizations,” Blackstone said.

“The path toward diversity means being intentional about building a diverse pipeline of talent,” JPMorgan West Region Head of Chase Commercial Mortgage Lending Kevin Pleasant said in a statement. “The path toward diversity won’t succeed if we expect this to be a quick fix.”

The sector must work harder to reflect the economy as a whole, said Yusef Freeman, an affordable housing developer who was a PGIM Real Estate vice president until earlier this year. 

In two years helping lead West Coast transactions for the asset management arm of Prudential Financial, Freeman said he would go to conferences attended by hundreds of acquisitions leaders where the lack of diversity among leading companies across the CRE asset management sector was stark. 

“It would be rare for me to see another Black face,” said Freeman, who is now a managing director for Jonathan Rose Cos. “If I did, it would just be one or two, and this was in the company of, being at events, with 400 or 500 people in them. It was just sort of the accepted thing.”

That kind of experience is reflected in the relatively scarce research and data on diversity in commercial real estate; an oft-cited 2013 report by NAIOP showed over 85% of senior executive and midlevel manager positions in CRE were occupied by White men and women. No major studies have been conducted since, and before this summer, there had been little public momentum for change. 

But when protesters filled the streets nearly six months ago, and many companies were asked to declare where they stood, the lack of movement in the industry morphed nearly overnight into a group of promises to do better.

“We are united in our commitment to the hard work of not just opposing overt acts of racism, but of using this time to proactively advance diversity and inclusion within Fannie Mae,” Fannie Mae CEO Hugh Frater and President Dave Benson said in a message to their employees May 29. “We need to be honest about the disparities we know exist in our society, and diligent in continually finding ways to ensure that the values we espouse come to life in our workplace.”


Inside The Boardroom

Wells Fargo, which has the country’s largest CRE loan portfolio of over $120B, has three people of color on its 17-person operating committee. At both the second- and third-biggest CRE lenders, JPMorgan Chase and Bank of America, 81% of U.S. executive officers are White.

Four top commercial mortgage originators Bisnow reached out to, Walker & Dunlop, KeyBank, Berkadia and Northmarq, each have less than 10% of their top leadership positions occupied by people of color, while combining to originate over $100B in CRE mortgages on an annual basis.

Berkadia, one of the country’s biggest commercial mortgage lenders, has no people of color in its seven C-suite positions, according to its website, and two people of color on its 14-person board. The Berkshire Hathaway subsidiary didn’t respond to multiple requests to comment on this story. 

Walker & Dunlop, the largest originator of Fannie Mae multifamily loans in the country, has one person of color out of 29 people serving on its five management committees of administration, revenue, strategy, operations and risk. 

W&D is rare in CRE finance not for its Whiteness in its upper ranks but because it has spent the last year setting explicit diversity targets and timelines, willing to look outside CRE for candidates. 

Last year, it started crafting 2025 goals of having 20% of management positions and 15% of top-earning positions held by ethnic minorities, targets Chief Human Resources Officer Paula Pryor said will be tied to executive officers’ compensation. W&D is currently at 9% and 5% representation, respectively. 

In pursuit of these targets, the company hired a chief diversity and inclusion officer over the summer. In addition to directing more hiring resources through partnerships with groups like Project REAP, W&D Executive Vice President and FHA Finance Group Head Sheri Thompson said the company will look outside of CRE, to alternative and complementary industries, for candidates.

“Clearly, there’s work to be done,” Thompson said. “You can’t just go recruit from the industry.”

KeyBank, too, will look to “underutilized markets,” according to Angela Mago, who leads commercial and real estate banking for the large U.S. bank. She said KeyBank Real Estate Capital has created a Diversity, Equity and Inclusion council holding managers accountable for recruiting diverse talent. 

Northmarq, which services a loan portfolio worth over $60B, told Bisnow it is looking to transform where it looks to for emerging talent in a companywide change Executive Chairman Eduardo Padilla, who chairs its new DEI initiative, said is for good reason.

“If you look at our website, you see a bunch of White guys standing around,” Padilla said. “I would say we did a poor job of really actively seeking a more diverse group. Quite often, we took the easier path of hiring from a relatively small field of people that knew a little bit about commercial real estate.”


A Giant Market 

With $3.7 trillion in outstanding commercial and multifamily mortgages in the U.S. economy, there is “a giant market” fueling the commercial real estate industry, Mortgage Bankers Association Vice President of Research and Economics Jamie Woodwell said.

The industry is crucial to providing equal opportunities for capital, but a lack of diversity at the top limits opportunities for professionals and communities of color, said Michael Banner, the president and CEO of a Community Development Financial Institution, Los Angeles LDC. 

“These are the decision-makers, and these are the people driving the industry,” Banner said. “If people of color are not there, and it's not very diverse, that's telling you that the decision-making process is going to be reflective of that.”

Banner said a White-focused decision-making process creates a lack of competitively priced goods and services for underserved communities of color. In South Los Angeles, for instance, it took USC promising to deliver a community-serving retail center alongside its plan for a large student housing project for grocery chain Trader Joe’s and retailer Target to arrive in the neighborhood, Banner said.

“This is not unique to Southern California,” he said. “It's somewhat of an urban market phenomenon, where you have underserved communities, typically people of color, and there’s a lack of goods and services.”

When large financial institutions have tried to broaden their diversity playbook, the process has sometimes been marked by missteps and gaffes. 

In June, Wells Fargo began recruiting for a new diversity and inclusion leader who will report to CEO Charles Scharf, a bank spokesperson said. The company is also changing its compensation system to hold senior management accountable to meeting diversity goals, requiring a diverse interview team for U.S. positions with compensations over $100K and continuing work with historically Black colleges and universities and Hispanic-serving institutions in recruitment efforts, the spokesperson said.

Over the summer, Scharf drew controversy for comments many called racially insensitive in the immediate aftermath of the George Floyd and Breonna Taylor killings.

"While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of Black talent to recruit from," he said in a company memo, CNN reported.

He apologized for that statement in September, calling his remarks insensitive and reflective of “my own unconscious bias.”

Wells Fargo said in a statement it is inviting feedback from its employees, hosting town hall discussions and using its diversity and inclusion council to look for ways to improve diversity. In response to Bisnow’s question as to whether it has diversity targets, it said it doesn’t have specific goals or quotas, but instead looks for ways to attract diverse talent.

Bank of America CEO Moynihan, who is White, has since 2007 chaired the company’s global diversity and inclusion governing body, which “promotes diversity goal setting,” a Bank of America spokesperson said. 

In June, the company launched a $1B commitment addressing racial equality and opportunity through virus testing and other health services, partnerships with HBCUs and Hispanic-serving institutions and other efforts.

Bisnow research indicates five of Bank of America’s top 23 executives are people of color, as are just three of its 17 board members. Bank of America declined to confirm the makeup of its 23-person corporate leadership team, instead sharing its latest human capital management report, which says 54% of the members of its 2020 intern class are people of color.


Other companies have spent the last year attempting social outreach. JPMorgan made a commitment in October to spend $30B over the next five years to create economic opportunities in underserved areas, especially Black and Latinx communities. Among a handful of initiatives, the company, which has over $3 trillion in assets, said it is starting a partnership with HBCUs and that it is incorporating diversity and inclusion progress into executive compensation decisions. 

While the millions in commitments and public outreach efforts signal positive momentum, experts say hiring diverse talent at all levels of a company is the most effective way to ensure it drives long-term change for good. 

“We have a long way to go, with our history in this country of both spatial redlining, literally blocking ownership and access to ownership, and then more the social redlining of structural racism,” Johns Hopkins Carey Business School associate professor Lindsay Thompson said. “Nowadays, commercial real estate isn’t just buildings.”

The Trillion-Dollar Jackpot

Three of the largest investors in U.S. commercial real estate, Blackstone, Brookfield Asset Management and Starwood Capital Group, have fewer than 20% of their top leadership positions occupied by people of color. Funds these private equity firms control have acquired billions worth of properties in recent years, many of which are in communities of color.

“In 1992, the market capitalization for equity real estate investment trusts was around $12B. Now, it’s over a trillion,” UCLA Anderson Senior Economist David Shulman said. “There's been a long-term trend where the finance side of real estate basically became the primary mover in whether things get developed or didn't get developed, and where it got developed and how it got developed. It all moved to the finance side.”

Blackstone, which has $571B in assets under management, has three people of color on a 20-person leadership team. Many of its investing business lines have co-leaders, and 60% of those co-leaders are either women or a person of color, a Blackstone spokesperson said. 

The company has made several high-profile pushes for some diversity in the last few months. Over the summer, it publicly committed to recruit from 44 schools this year and next, compared to nine in 2015, with its list including HBCUs like Howard University. 

Blackstone expanded its 12-person board to 13 on Sept. 15, when it appointed its lone director of color: WilmerHale attorney Reginald Brown, a Black man. It also announced in October two new initiatives promoting further portfolio company diversity. 

“Diversity of ideas and backgrounds makes us stronger, which is why we are working hard to expand diversity at Blackstone and our portfolio companies,” a Blackstone spokesperson said in a statement for this story. “Today, 60% of our primary investing businesses and corporate groups have a woman or diverse professional as one of their top two leaders. Our largest business, Real Estate, has a woman as co-head and we’ve made significant progress in hiring diverse talent in leadership roles across our portfolio companies. We are committed to expanding this work.”

Brookfield Asset Management, which has about $550B in assets under management, has 38 real estate managing partners and directors, five of whom are Black or Asian, a Brookfield spokesperson confirmed. It recently created a global diversity advisory group led by employees, reporting to senior management, with a goal of providing “insights into the challenges and successes around attracting and retaining members of the Black community.”

Starwood Capital Group has one person of color on its seven-person board and three people of color in its 13-person C-suite, Bisnow’s analysis found. Starwood declined to comment. 

Principal Financial Group, the parent entity of Principal Real Estate Investors, confirmed the diversity of its leadership — 11% of its C-suite and 18% of its board are people of color. The leadership team at Principal Global Investors, the company's asset management arm, includes 17 members, six of whom are female or people of color.

Nuveen’s C-suite is less than 80% White, but with over $130B in assets under management, Nuveen Real Estate-specific leadership lacks racial diversity compared to its parent entities, Nuveen and TIAA. 

The company is looking to create a diverse pipeline of talent eventually equipped to take over the reins, Nuveen Managing Director and Global Chief Operating Officer Reisa Bryan, the real estate group’s lone executive of color out of 11 people, told Bisnow

“Have we tried to find other African Americans to sit at that table? Absolutely,” Bryan said. “I would say that that the pool is very difficult to get to, so that’s part of the reason why, but it’s not for lack of trying.”

Barings, which has one person of color between its 11-person C-suite and seven-person board, is doing more early career outreach and, like Nuveen, working with nonprofits like SEO to find candidates of color, Global Head of Talent Acquisition Gina Martindale said.

Leadership “is not going to change overnight,” she added, but the company hopes efforts like a new DEI officer, which she said it is close to hiring, will help it get there. 

“We are not going out and saying, ‘This is only open to this person that looks a certain way,’” Martindale told Bisnow. “We want to make sure that the diversity, equity and inclusion that we’re focused on is open to all qualified candidates.”

Northmarq’s Padilla, who said he lacked knowledge of the commercial mortgage industry before entering it out of law school, said his eventual promotion to CEO “was extremely unusual” compared to his larger peer group. 

He said his hope is that that changes eventually, but that “our view is the best we can do is develop talent.” 

“We create careers that change lives — our industry and our business,” Padilla said. “The opportunity to create true wealth is there."