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 the entire series, please click here.
The upper echelon of commercial real estate is only slightly more diverse this year than last, as some of the industry’s largest firms have increased representation on their boards and executive teams and others backslid.
Despite the small gains for women and people of color in some segments of the business, equal representation is still well out of reach — and what victories have been achieved are at risk of being undone as companies embroiled in an economic crisis are forced to confront the true value of diversity, equity and inclusion.
“Now is where you’re going to put your money where your mouth is,” said Amanda Levin, chief operating officer at Local Logic, a proptech company that provides insights for CRE. “We’re not saying make irresponsible financial choices for your business, but if you’re committed to diversity, equity and inclusion, you will do this in a way that retains that commitment.”
The percentage of people of color in the C-suites and executive teams across 89 of the largest firms in the industry — spanning brokerages, lenders and asset managers, REITs and private developers — rose from 10.9% to 11.6% year-over-year. People of color now make up 18.3% of board seats, up from 16.4% last year.
Women make up 25.6% of CRE executive teams, compared to 23.5% last year. Board representation for women rose to 29.6% from 28%, although an industrywide shrinking of board seats led the number of female board members to drop to 203 from 205 last year.
Dustin Sutton, founder and managing director of the Black Commercial Real Estate Network, said incremental gains are better than none at all, and individual efforts are beginning to coalesce into slow but steady progress.
“I believe that pace is more important than speed,” he said. “You don’t fix your plumbing with a hand grenade — you have to do the best with what you have.”
Bisnow first compiled data on the highest levels of commercial real estate in 2020, in the aftermath of the murder of George Floyd and the ensuing racial justice movement that swept the country, including corporate America.
As companies across the industry made statements and promises to support greater diversity, measuring those commitments and holding CRE accountable was the project's stated goal.
In this third iteration of the project, to gain a deeper understanding of how those diversity efforts have played out, Bisnow for the first time began collecting information on titles.
More than half of the female executives in the C-suite are working in support and personnel roles, such as legal, human resources, marketing and administration. By contrast, only five of the 89 companies Bisnow tracks have women serving as CEOs, two of whom were added this year.
People of color have greater proportional representation in financial and senior leadership roles, such as chief operating officer or head of a business line, while more than 40% serve in support and personnel roles and only seven CEOs identify as racially or ethnically diverse.
The lack of diversity among CEOs is a vestige of the commercial real estate industry’s failure to nurture the careers of women and people of color, which led to a collection of company leaders who are mostly male and mostly White, Levin said.
“It’s very sad that so few CEOs are diverse in any way,” she said. “It’s reflective of who this industry was, but it doesn’t need to be reflective of who this industry is or can be.”
The concentration of people of color and women in support roles also underscores the commitment other industries made to diversity long before CRE bought into its importance, she added.
“These are people who have great industry expertise but who also cut their career chops in other fields,” Levin said. “We’re pulling them from finance, we’re pulling them from tech, places where these conversations … happened a little earlier.”
Avison Young added two people of color and three women to its executive committee and one person of color to its board in 2022. Headhunters at the firm have been instructed to leave no stone unturned, which CEO Mark Rose said has opened the company up to hiring avenues it never knew existed.
“This isn’t just a matter of ticking a box, that we’re able to go out and find someone who isn’t a White male,” he said. “There’s an entire program or process here to make this really sustainable. I do think the industry is doing a better job. With that said, it could be better.”
Because the environmental aspect of ESG is highly regulated and easy to measure, the focus on diversity may start to wane, said Ernie Jarvis, CEO of Washington, D.C.-based Jarvis Commercial Real Estate.
“I think ESG has legs and is here to stay, especially when you have governance oversight with entities like the SEC,” he said. “My sense is that the DEI initiative will be important but no longer a priority, and it will lose momentum.”
Compared with last year, the makeup of the boards and C-suites of the largest banks, mortgage brokers and asset managers in commercial real estate saw some modest improvements but also declines, most notably in the number of people of color and women in executive ranks.
At the 24 firms in the category Bisnow examines, people of color made up 14.5% of executive teams, down from 15.3% at the same firms at this time last year. The companies’ boards of directors, however, saw diverse representation rise to 24.8% from 22.5% last year.
Just under 26% of C-suite positions and 33.4% of board seats at the firms are filled by women, compared to 26.8% and 30.7% last year, respectively.
Some companies have made incremental progress. Voya Financial has three executives of color out of 12, and five of its nine independent directors are women — well ahead of the industry average. In 2021, the company had two people of color as executives and four women on its board of directors.
“These days, when our DEI team goes to conferences and other events, we’re pleased to see that our efforts compare very well or even exceed those of other companies in attendance — and we’re happy to share our practices," said Angela Harrell, Voya chief diversity and corporate impact officer, as well as president of the Voya Foundation.
Its efforts include establishing a formal supplier diversity program and its commitment to disability inclusion within the workplace through its work with groups like Disability:IN, an Indiana nonprofit, Harrell said.
Other companies active in CRE finance lost ground compared with last year. The number of women in Bank of America’s C-suite dropped from 10 to seven, and the number of women on its board dropped from six to five. The bank did, however, add a person of color to its board.
The bank didn’t comment directly on the year-over-year changes, but a spokesperson said it has thus far funded nearly $400M of a $1B commitment it announced in 2020 — and raised to $1.25B in 2021 — to “create opportunity for people and communities of color in the areas of health and healthcare, jobs/reskilling, support for small businesses and affordable housing.”
Another megabank, Wells Fargo, has four people of color in its C-suite this year, down from five last year, but four on its board, up from three. The bank had six women in its C-suite last year and five this year, but it gained a total of two women on its board, up from three to five.
"The changes we’re committed to make will not be achieved overnight," Wells Fargo Head of Communications for Diverse Segments, Representation & Inclusion Cynthia Sugiyama said in an email. "We acknowledge that we have much work to do in the months and years ahead.”
She stressed that the company is also changing how it recruits and hires, supports, elevates and retains its underrepresented talent.
Most of the people of color in executive positions in real estate finance were in back-office positions, such as human resources, chief information or legal officer, and chief of diversity, equity and inclusion.
"We're growing the base, but not fast enough," said Paper City Investments Managing Member Gardner Rivera, whose company was not on Bisnow's list. "Latino and minority leaders still have an issue with being visible outside of our local communities."
Still, as the growth of Latino participants in finance, construction and residential real estate increases, Rivera said their increased entry to commercial real estate is inevitable.
"Now there are a multitude of organizations in residential real estate, commercial real estate finance and advocacy that are champions for a more diverse industry landscape.”
Many of the nation’s top brokerages have been intentional about hiring diverse talent, and that effort has begun to translate to change at the upper echelons.
Bisnow’s analysis found that the share of women and people of color at the C-suite and board levels of 16 of the largest commercial brokerage firms saw an average increase of just over 2% since last year.
This is an improvement over the mostly flat change seen between 2020 and 2021, but Jarvis, a former managing director and market leader at CBRE who now owns his own firm, said the difference is still too small to be noticed in everyday settings.
“When I go to meetings and my peers go to meetings, we are still the only person of color in the room,” he said. “It doesn’t feel like [progress]. It gets buried somewhere.”
There are 24 people of color in top leadership positions, up from 19 last year, and there are 59 women in the C-suite, a bump from 47 in 2021. Several companies made year-over-year improvements, while others saw no change or a decline in representation.
Savills, which had no women in its C-suite when Bisnow ran its analysis in 2021, promoted Ann Duncan Inman to chief strategy officer and chief diversity officer late last year. Kidder Mathews hired Christine Young, a female person of color, as its director of human resources.
While Cushman & Wakefield added two women to its C-suite, it lost its only executive of color when Chief Transformation Officer Kalani Reelitz left the company this month. Newmark continues to be run exclusively by White men.
One of the ways Toronto-based Avison Young has gone about improving diversity is by giving market directors the option to do away with the traditional “commission and draw” pay structure used for entry-level brokers. Instead, some new employees start with a fixed salary that over a three-year period transitions to commission-based compensation.
Avison Young U.S. President Juan Bueno said providing the option is essential to the success of many diverse brokers who don’t have generational wealth to fall back on in the early years of their careers.
“We understand that you don’t have the connections that a quote-unquote White, privileged male would have in a local market,” he said. “We’re going to set you up for success.”
More brokerages need to embrace this change in order to diversify their ranks, Jarvis said. With companies looking for more diverse talent, he said other areas of the CRE business often have an easier time with recruitment because they offer more financial security.
“The big guys are recognizing that African American talent is in high demand, and financial services … are more attractive to young African Americans because there’s no draw and you start off with a salary,” he said. “In brokerage, we call it the ‘pledge of poverty.’ For two or three years, you don’t make any money.”
At the board level, the number of people of color increased from 21 to 25, but women saw a setback. JLL, Savills, Transwestern, SVN and Cresa were among the firms that lost female board members, causing the total to drop from 51 in 2021 to 46 in 2022.
Adeola Adejobi, who founded the Avant-Garde Network to bolster Black and diverse professionals working within a variety of industries, said boards' low profile compared to C-suites means there is less external pressure to ensure diversity, which could explain the decline in female representation.
“When we talk about attracting diverse talent, people focus on who is in leadership,” she said. “They don’t necessarily say, 'Who is on the board?' But being deliberate and seeking out diverse folks to participate on the board to provide different types of insight and perspective is critical for any company serious about growing.”
One demographic still wildly underrepresented at brokerage firms and across the industry as a whole is the Latino population. Latino men make up only 2.9% of senior executives in the CRE industry, while Latinas make up less than 1%, according to a study by CREDiversity.com.
More than a year ago, Avison Young hired Bueno to lead the U.S., and while he acknowledges the need for a specific hiring initiative aimed at Latinos, Bueno said his presence in a leadership role goes to show that someone of his background can excel in the company.
“Just the fact that there’s someone that speaks like me, that looks like me, that is running the U.S. is allowing us to have conversations we were not having before,” he said.
Despite the progress made over the past year, money set aside for DEI efforts, which often includes diverse hiring, could be on the chopping block as companies reckon with a potential loss of profits brought on by a recession.
CBRE has already announced plans to cut costs by $400M, the vast majority of which will be related to staff reduction. JLL spent $9.4M in the third quarter on severance and other employment-related charges, up nearly eightfold over the previous year.
“Here’s what worries me,” Jarvis said. “At this moment in time, we’re going into a recession, and there will be cost containment initiatives at every large company. There will be belt-tightening, and if you don’t really produce revenue … it’s easy to [cut] these softer things that don’t really bring in revenue.”
Diversity gains in the top ranks of some of the development community’s biggest firms have been small, but not insignificant.
Developers added four people of color and 12 women to their highest levels of leadership, which totals 431 executives across 24 companies. These additions bring the representation in the C-suites of those companies to 9.3% people of color and 24.6% women — up from 7.5% and 20.8%, respectively, last year.
Ten companies have added women to their top ranks since 2021, whereas only five firms — CIM Group, Madison Marquette, The Michaels Organization, Tishman Speyer and Trammell Crow Residential — added people of color in the same period.
A spokesperson for Tishman Speyer, which added two women and one person of color over the past year to its upper ranks, noted that the company "continues to identify and recruit candidates from a variety of perspectives and backgrounds" and works with hiring partners — including Sponsors for Educational Opportunity, the Mayor’s Fund to Advance New York City Ladders for Leaders, the New York Jobs CEO Council and the Robert Toigo Foundation — to help it meet its goals.
There are still no CEOs of color among the two dozen developers Bisnow tracks, but there are two female CEOs. In 2021, Hines brought on co-CEO Laura Hines-Pierce, making her the first in the group. This year, Majestic Realty Co. CEO Reon Roski became the second.
Both women are part of long commercial real estate legacies, helming companies founded by their grandfathers and, in Roski’s case, taking over the role from her father. Hines-Pierce is co-CEO along with her father.
Although the increases were predictably well-received by industry watchers who spoke with Bisnow, all agreed that there was still much more to do.
It will take more than a decade at the current rate of growth for the leadership of these development companies to look like the rest of the country, 42% of which isn't White, USC Lusk Center for Real Estate Director and Chair Richard Green said.
“That's a long time,” Green said. “And that’s assuming we keep this momentum going.”
There are potential hurdles to that momentum looming. Concerns about the rising cost of borrowing and a recession are impacting CRE and, for some companies, layoffs are already in the cards. Research on the wider workforce has shown that layoffs affect women and employees of color in greater numbers than their White counterparts.
Taking a look at industry data after layoffs will tell a lot about which companies are committed to diversifying their ranks, Green said.
Some have seen diversity pushes get ushered into the social portion of ESG — and then the focus is mostly on the easily quantifiable E, for environmental, instead of the harder-to-define S.
“For the environmental stuff, there's a little bit more clarity about what the very specific practices that you can put in place are,” Builders of Color Executive Director Colleen Fonseca said.
Her organization, which is based in and focused on Boston, is rolling out a list of successful DEI best practices to address this.
“We’d like to see the S keeping pace and catching up with the E and the G,” Fonseca said.
Making real progress will involve keeping the pressure on companies to make strides here. Fonseca said that she has seen a real commitment to advancing DEI that she attributes, at least in part, to Boston’s new requirement that developers disclose the diversity of their project teams.
Danny Bakewell Jr., the executive vice president of South LA-based development firm The Bakewell Co., agreed.
It will take decision-makers and elected officials “that are going to fight for inclusion, diversity and equity and make that part of the mandate, that say, 'I want to see a team of developers that looks like the community in which they're building,'" he said.
REITs, which made substantial strides toward greater representation last year, failed to progress on diversity in any meaningful way in 2022. In some cases, they took steps backward.
Of the 26 S&P 500 REITs that Bisnow researched, which included companies such as BXP, Prologis and Simon Property Group, only two people of color were added at the companies’ highest levels over the last 12 months.
This increased the number of people of color within the C-suite to 16, up from 14 in 2021, a percentage hike from 8.2% to 9.7%. The total sizes of C-suites dipped slightly as well, from 170 in 2021 to 165.
Equinix Chief Legal and Human Resources Officer Brandi Galvin Morandi, who oversees the company’s community and belonging group, which manages its diversity initiatives, told Bisnow that recruiting diverse talent doesn’t just happen on its own. She said while the company is proud of its current DEI initiatives, it has more work to do when it comes to hiring women and people of color.
“You can't keep fishing in the same pond and expect to catch a different fish,” she said. “You need to be focused on bringing in leaders, and that may require you to tap into networks or specialized recruiting firms, but it requires intent. It doesn't just happen on its own. And I'm not saying it's not challenging or, like I said, doesn't require intent. But the pipelines can be built.”
The number of women employed in REIT C-suites dipped slightly to 18.8% from 19.4% in 2021.
The proportion of people of color across boardrooms dipped from 43 to 42 this year. The number of women in boardrooms also dropped slightly, from 83 to 79. The total number of boardroom occupants also dropped to 260 from 272, though it should be noted that last year’s numbers included Duke Realty, whose boardroom and C-suite were dissolved earlier this year following its acquisition by Prologis.
A report published in September by Ferguson Partners that analyzed diversity numbers for REITs across boardrooms and executive leadership illustrated a broader trend of diversity improvement across REIT boardrooms industrywide, but progress was still slow.
“I would venture to guess that the positive lens would suggest that it could be simply as the Board not having been refreshed much (keep in mind that in most years only one Board seat opens up, so to see a meaningful impact will take time) though the negative lens would suggest that there still exists, to a small degree, a denial that diversity matters,” Ferguson Partners Vice Chairman Jeremy Banoff wrote in an email to Bisnow.
Data from Ferguson’s report indicated that boardrooms with a more diverse makeup tended to perform better financially on average.
The majority of REITs researched by Bisnow are still operating with one or zero people of color across their C-suites, despite public promises to improve diversity.
Other REITs instead referred Bisnow to their annual ESG reports. Colorado-based UDR's report noted several DEI initiatives undertaken at various levels of the company, including "expand[ing] the application of the 'Rooney Rule' concept to the hiring process for all associates with the intention of increasing diversity throughout UDR’s workforce and, in 2022, incorporated DEI performance into executive compensation."
The firm's ESG report said those serving in management roles were 73% White. It entered into a partnership with the Colorado Diversity Council this year in an effort to improve its diversity initiatives companywide.
UDR still has no people of color in its C-suite and one on its board — the same as last year — but it did hire a woman, Patsy Doerr, as its chief ESG and people officer in July.
Egbert Perry, the CEO of Atlanta developer Integral Group, served on the board of Fannie Mae for a decade, and he suggested that the industry’s reluctance to advance people of color is deeply ingrained. He said it will be up to the younger generation to shake things up if there will ever truly be progress.
“It's the system, it’s the process — that's what stifles,” Perry said. “And I tell the younger generation that they're the ones that have to change the game. There's no cavalry coming in. … They’re the cavalry. And they may even find themselves, in pursuit of the greater good, having to fight some of the very folks that ought to be their allies.”
CORRECTION, NOV. 14, 3:30 P.M. ET: A previous version of this story didn't include a complete picture of Eastdil Secured's C-suite. The data and content for this story have been updated.
CORRECTION, NOV. 14, 5:15 P.M. ET: Amanda Levin is the chief operating officer of Local Logic. A previous version of this story misstated her first name. This story has been updated.
CORRECTION, OCT. 20, 2023, 11:30 A.M. ET: A previous version of this story misstated the number of female CEOs at the industry's biggest companies. This story has been updated.