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The Big Missing Piece That Could Derail Commercial Real Estate’s Diversity Push

This is the third annual installment of Bisnow's DEI Data Series, an ongoing investigative project that examines the diversity of the boards and executive leadership of the biggest companies in commercial real estate. Over the years, this award-winning series has amassed a cache of data that continues to shine a spotlight on racial and gender inequality at the highest ranks of the industry. To read this year's data analysis, please click here. To read the entire series, please click here.

Angela, a multiracial woman who has worked in commercial real estate for nearly two decades, joined a new company this year as a vice president. But soon after starting at the Florida-based firm, she found that she was the only woman on a team of roughly 30 people.  

Angela, whom Bisnow agreed to give a pseudonym to protect her identity and allow her to talk candidly about her company, remembers the thought that went through her head during the first meeting where she saw the makeup of her team.  

“I said to myself, ‘Yeah, this isn’t going to work,’” she said. “In my experience, being the only woman … that hasn’t worked well for me. I’ve experienced very tough challenges that I’ve had to navigate in terms of being heard, being respected and being treated as an equal.” 

These challenges are now facing women and people of color across commercial real estate, an industry long dominated by white men that has sought to increase the diversity of its ranks in the two years since George Floyd’s murder sparked a racial reckoning. While companies have achieved modest improvements in diversity at the C-suite and board levels, and they have launched new initiatives to bring in more diverse employees at the entry level, experts say there is a big missing piece in the industry’s strategy.

The Big Missing Piece That Could Derail Commercial Real Estate’s Diversity Push

“There is a falloff in diversity at the middle management range,” said Melina Cordero, a former executive at CBRE who now runs her own consulting firm focused on diversity, equity and inclusion efforts. “I’m not sure a lot of firms even realize the extent of the problem.”

The 2021 Global Real Estate DEI Survey, conducted by Ferguson Partners in partnership with Urban Land Institute and other industry organizations, shows how diversity varies at different levels of the North American real estate industry. It found that among senior-level professionals — one level below executive management — 84% were white and 71% were male. Midlevel professionals were 70% white and 58% male. Junior-level professionals were more diverse than their bosses: 60% were white and 48% were male.

Several experts told Bisnow they don’t see enough focus from commercial real estate firms on diversity at the middle management level, and they say companies aren’t giving enough weight to equity and inclusion for their diverse employees to help them succeed and advance to higher roles.

“A lot of organizations in commercial real estate, they focus on the D, the diversity, which means recruit recruit recruit, and not really spending time on building more inclusive and equitable workplaces,” said Jazmen Johnson, vice president of DEI for retail trade association ICSC, whose members include many of the largest real estate owners and brokers.  

“You won’t continue to see the benefits of recruitment if people don’t feel valued or they don’t feel like they belong in your organization,” Johnson said. “They’re dealing with those implicit or explicit biases and don’t see a clear path for promotion. That’s all a part of culture. If you’re not doing the work to address those issues, your recruitment efforts are kind of null and void.” 

For many of the people of color and women who join new companies, seeing management ranks full of white men can cause them to consider leaving the company and even the industry, a problem that could derail commercial real estate’s diversity push if companies don’t focus more on retention.

Roughly 60% of industry professionals view their companies as “not at all diverse” or “not very diverse,” according to the 2020 CREW Network Benchmark Study, which surveyed 2,930 commercial real estate professionals during the first quarter of 2020. The survey also asked respondents the gender of their first boss at their current company: 68% said male and 23% said female.

“You question your own glass ceiling, you question your own trajectory, because you don’t see other people who look like you in those positions,” said Kelani Blackwell, a former broker at CBRE who last year founded Women in Real Estate, a group focused on supporting women of color that has been expanding across the country. “It is discouraging.”  

'A Real Neglect Of Retention' 

Many commercial real estate firms launching diversity efforts in 2020 had a two-pronged approach: make additions to the visible C-suite and board levels and recruit diverse college graduates at the entry level. But experts say there has been relatively little focus on increasing middle management-level diversity and on supporting diverse employees.  

“If you go to DEI panels, 99% of the conversation is about recruitment, and there’s an emphasis on ‘How do we bring in more diverse people and where do we find them?’” Cordero said. “There’s a real neglect of retention; of how do we make sure the environment is welcoming and they’re supported, given that they face more obstacles and pushback.” 

A chart from the Global Real Estate DEI Survey 2021 shows entry-level employees are more diverse than their bosses.
A chart from the Global Real Estate DEI Survey 2021 shows entry-level employees are more diverse than their bosses.

The obstacles that women and people of color face, sources said, range from inequitable compensation structures to implicit bias, in which diverse voices aren’t taken as seriously, to explicit harassment. The CREW survey found that 45% of women have experienced offensive behavior in the workplace within the prior year.

“A lot of company leaders aren’t aware of that dynamic, of those obstacles,” Cordero added. “They’re so focused on the challenge being the talent pipeline, they forget there’s this whole other set that is super important, that is, 'How do we support them, make sure they grow and thrive?'”  

Manikka Bowman, executive director of Project REAP, said there is a misconception in the industry that companies don’t have qualified, diverse employees whom they can promote to managerial roles. Project REAP has worked to support diverse real estate professionals for 24 years, and she said it has many members who could be candidates for promotions.  

“There’s this assumption that there’s just not enough talent, but we know that’s not accurate,” Bowman said. “This challenge that in order to diversify you have to start at the entry level is something we have to reimagine as an industry, because there are tons of talented professionals out there.”  

She said companies can hire diverse managers from fields such as law, engineering and finance that have applicable skills to real estate. While she said entry-level hiring is important, she said more companies need to pair that with management hires by pursuing a “both and” approach.  

“There’s a huge push around entry level, and I think the opportunity for growth is really now thinking strategically around middle management for the now,” Bowman said. “Not thinking about investing at the beginning of the pipeline in hopes that in five to 10 years it’ll give you a return, but recognizing there are opportunities to diversify now.”  

LaMean Koroma, a senior vice president at Cresa and chair of its diversity, inclusion and belonging council, said he was the first African American to rise from the entry level to the senior vice president level in the brokerage firm’s history. He said his ability to climb the ranks came from a combination of his own hard work and the support he received from his firm. He hopes more firms show that type of support to their young talent.

“There is an intentionality and deliberate nature that it’s going to take to get people in and say, ‘We are going to invest in this talent to try to ensure that people are successful,’” Koroma said. “There’s a certain percentage on what it’s going to take from the individual to be successful and stick with it and have the skill set to make it. And there’s an investment, both a monetary and a time commitment kind of investment, that it’s going to take from the firm.”  

Blackwell said she thinks firms place too much emphasis on an individual’s skill set as the reason why employees do or don’t succeed, and they often don’t pay enough attention to ensuring there is an even playing field for diverse employees.

Members of the Women in Real Estate group at one of their first events.
Kelani Blackwell, center, with Members of the Women in Real Estate group at one of their first events in Chicago in 2021.

“I think that they chalk it up to the nature of the business, that it’s an eat-what-you-kill environment, so go out and be aggressive,” Blackwell said. “They’d rather say that than admit it’s an inequitable environment.”

‘We Can Get Them In, But We Can’t Keep Them’ 

The No. 1 barrier to success that commercial real estate professionals face, according to the respondents of the CREW Network survey, is a lack of promotion opportunities.  

By not focusing enough on helping people of color and women advance to management roles, experts say commercial real estate firms are at risk of losing their diverse talent and failing to live up to the commitments they made in 2020.

While they say the industry needs to focus more on retention, experts have seen some promising examples of companies enacting initiatives they hope others will replicate.

A key starting point, ICSC’s Johnson said, is tracking not only how many diverse employees a company hires, but also how long they stay with the organization and how often they are promoted to higher roles. Companies can set goals for those metrics.  

Johnson has also seen firms launch DEI committees that can help support diverse employees with the challenges they face. And she has seen some companies launch mentorship programs not just for new employees, but for mid-career professionals to talk with higher-level executives about how they can advance within the company. She said employers should discuss the paths for promotion during their regular employee review process.

“It’s really important for our industry, because there are not a lot of women and people of color in those positions. We have to be extremely clear in creating pathways to those positions,” Johnson said. “If we don’t see people who look like us in those positions, it’s really hard to see yourself working toward those opportunities … It ties back to retention. If you know what you’re working toward, it’s easy to stay around.” 

Keiana Barrett, director of diversity and strategic development for Chicago-based Sterling Bay, said the 185-person development firm has seen the importance of showing diverse employees that there are pathways for promotions. She said the company’s twice-monthly newsletter has a dedicated space to announce promotions.  

“It starts first and foremost with demystifying the notion that growth is not possible, and recognizing that many times that notion exists because we’ve missed out on opportunities to communicate what’s happening with the company,” she said. “[The newsletter] creates a different type of consciousness around the fact that there is a trajectory toward advancement.”  

She said Sterling Bay also uses professional development as a retention strategy by offering tuition reimbursement to employees who pursue new degrees and certifications. Additionally, she said the firm has an inclusion committee that helps support its diverse employees, and it focuses on mentorship by connecting entry-level employees with senior leadership to talk about pathways for advancement.  

The 2021 DEI survey found that 67% of real estate firms set defined hiring targets for underrepresented groups, while 45% had defined promotion targets for underrepresented groups. The survey also found that less than half of companies had transparent decision-making regarding promotions, and 48% provided clear criteria for promotion at all levels of the company.  

The survey also identified trends in promotions and departures. Of all the midlevel professionals it found that were promoted in the past year, 41% were white men, 28% were white women, 15% were men of color and 13% were women of color. The makeup of junior-level professionals who received promotions was roughly the same, but the departures at the lower level show that more diverse employees left their companies.  

Of all the junior-level professionals who departed within the last year, 32% were white men, 24% were white women, 18% were men of color and 18% were women of color.  

“Every major firm is trying to recruit diversity, so there’s a lot of competition for that talent,” Cordero said. “So if you’re not feeling welcome, and you’re not feeling that you are going to be successful here, you leave.”  

CBRE head of Americas retail research Melina Cordero
Melina Cordero, a former executive at CBRE who now runs her own DEI consulting firm

The last two years have seen a trend of employees not only leaving their jobs, as part of the Great Resignation, but also of people switching industries. A July survey of over 12,000 corporate employees from McKinsey & Co. found 40% of U.S. respondents were thinking about leaving their jobs in the next three to six months. Of the employees it surveyed who had left their jobs, 48% went to companies in different industries.  

“In CRE, these firms aren’t only competing with each other for this talent, they’re competing with tech, they’re competing with consulting, they’re competing with finance,” Cordero said. “The competition is huge for qualified, diverse employees. So yeah, absolutely they’re leaving, and I hear that anecdotally from leaders I talk to, they say, ‘We can get them in, but we can’t keep them.’”

For firms that have historically had a poor track record on diversity and are trying to hire women and people of color, those first hires will often face an uncomfortable environment, but Project REAP’s Bowman said firms that make them feel supported will be able to retain their diverse talent.  

“Being able to shift the culture within the institution is really key,” Bowman said. “That means support for those people that may not have the representation needed. They carry a heavy burden being the only woman or person of color, it’s a heavy burden to bear.”  

Angela, the woman who joined an all-male team this year, said she is considering leaving for a company that puts a greater focus on diversity. She said her company has sent out communications at the corporate level about its commitment to DEI, but she hasn’t seen initiatives materialize within the firm to support their diverse employees.  

“Perhaps if I had the opportunity to continuously work with more diverse groups of people, I might have had different experiences, I might have had more positive experiences in challenging situations, or it’s even possible that those situations might not have even happened,” she said.  

While Angela said she has always loved working in commercial real estate, this year she said the wind has been “knocked out of my sails” as she has been forced to directly confront the industry’s lack of diversity.  

“I have thought about throwing my hands up altogether, thinking maybe I should try something different because I’ve experienced a lot,” she said. “It kind of makes you wonder if you have the energy to keep combating it, and to keep pushing forward. And then you go to sleep, and you wake up the next morning rejuvenated because every day is a new day, and you say to yourself like Buzz Lightyear, ‘not today.’ So I’m not going to quit commercial real estate altogether, but it did cross my mind in some emotional states.”