'I Hope That They Get Excited': The Rarity And Importance Of Latino Success In CRE
As the CEO of a company that has completed multibillion-dollar transformational redevelopment projects, Roberto Perez doesn’t dwell on how rare it is for a Latino to be where he is. Instead, he chooses to focus on what he can do from his position.
“I like to lead by example, and I come from a humble background in the sense that I don’t come from the real estate world,” said Perez, who runs Chicago-based HRP, a subsidiary of Hilco Global formerly known as Hilco Redevelopment Partners. “So I started from scratch, and today I have the opportunity to cause change not only in how we clean up assets, but in how we deploy capital among contractors who have to hire subcontractors, and in how the project gets developed. When a young Latino kid sees somebody like me being successful, I hope that they get excited and they can imagine doing it, too.”
Latinos are the largest minority group by population in the U.S. and the second-fastest-growing after Asians. Like other ethnic minorities in the U.S., Latinos make up a larger portion of urban areas than suburbs or rural areas. But, with the unique and notable exception of Miami, they occupy a vanishingly small portion of leadership at commercial real estate companies, even in cities like New York and Los Angeles that are home to the largest Latino populations in the country.
Though an estimated 18.5% of the U.S. population identifies as Hispanic or Latino, only about 6% of commercial real estate professionals do, according to a study by CREDiversity.com. Latino males make up only 2.9% of senior executives in the industry, with Latinas making up less than 1% at that level.
As a result, just a few Latino commercial real estate leaders end up having an outsized impact with the examples they set.
Latino commercial real estate executives noted in conversations with Bisnow that representation has improved marginally in the past couple of decades, at least anecdotally. But so far, the only weapon Latinos seem to have against the structural issues preventing proper representation in commercial real estate is to create space for themselves — launching their own companies, using those companies to give others opportunities, and going from there.
The progress is agonizingly slow, but far from insignificant.
The latest initiative by HRP to create more space in the industry for Latinos is a collaboration with the Greater Philadelphia Hispanic Chamber of Commerce called Build Latino. Just announced last week, the program will recruit Latino-owned businesses in trades related to commercial real estate and construction for a 15-week intensive training program aimed at giving them the tools to bid for larger commercial projects.
Last year, HRP was named the master developer behind the complex transformation of a massive, notorious former refinery in Philly into an e-commerce hub. Build Latino is part of the company’s community engagement, both with the city at large and with the neighborhood surrounding the site. That neighborhood has a high percentage of people of color and a fraught history of environmental and health issues as a result of its proximity to a fossil fuel plant.
The 44-year-old Perez moved from Puerto Rico with his family when he was in seventh grade, and his company focuses on remediating large sites with long, toxic industrial histories and transforming them, which it has done in the metropolitan areas of Chicago, Boston and Baltimore.
Soon after HRP closed on the Philly refinery site, Perez and HRP Senior Vice President of Corporate Affairs Jasmine Sessoms attended a breakfast with about 15 members of the Philadelphia Latino community. The community members glowed with pride upon seeing that the company overseeing the project was led by a Latino, Sessoms said.
“Just from that 15-person breakfast, hearing, ‘We’re so proud of you, you’re one of us, how can we support you?’” Sessoms said. “The level of pride and support they showed was something I really have never seen before.”
“It was really cool being in a room, speaking Spanish the whole time and swapping stories,” Perez said.
While speaking primarily Spanish can be a disadvantage when attempting to navigate the traditional halls of power in commercial real estate, it is not only an advantage when attempting to develop in Latino-majority neighborhoods but a meaningful trust builder.
“We do a ton of our work in Spanish,” said Primestor CEO Arturo Sneider, whose company develops mixed-use projects in underserved, racially diverse areas of Southern California. “You can put people at ease in terms of what you’re saying and the way you’re conveying it. There’s also the broad experience of being from those communities that gives you an understanding of how a building’s architecture, use, branding, etc., will be received. That’s all a cultural sensitivity and awareness; coming from the community and being respectful can give you a real connection.”
As Latinos grow in numbers, they gain influence as a class of consumer, especially in residential real estate, where they are more likely to spend capital than other ethnic groups. But comparatively little progress has been made by non-Latino commercial real estate companies in understanding the value of Latinos both as customers and as contributors.
“The industry needs to talk more about the incredible economic impact Latinos have,” said Peter Guzman, president of both Las Vegas-based commercial investment and consulting firm The Opa Group and Nevada’s Latin Chamber of Commerce. "Their buying power, spending power, entrepreneurship — all of that needs to be talked about more.”
Ultimately, the way to bring more Latinos into commercial real estate likely traces the same path employed to build wealth in other underserved communities of color: investment in businesses and job training. Such is the reasoning behind HRP’s Build Latino program and other scattered initiatives across the country attempting to help Latino-owned businesses build capacity to take on commercial projects.
In its early years, Primestor could not find enough employees, contractors and others to reach Sneider’s representation goals for the company’s projects. It has spent years working to build capacity within the Latino community through training and support, he said.
“Today, it’s better, but it’s still far from anything that would even make a dent as a percentage of the population or in general,” Sneider said. “Part of [the problem] is the fact that commercial real estate, separate from residential real estate, is a very complex business. There’s a lot more to it in terms of knowledge, and generally speaking, institutions and industry have been built on a foundation that isn’t exactly the most-favored-nation status for minorities.”
Though Latinos don’t share the history of hundreds of years of slavery and legalized discrimination in the U.S. with African Americans, the two groups were often lumped together in redlining policies for much of the 20th century. For that reason, many Latino neighborhoods share the same issues of disinvestment and systemic neglect — but with an added layer of isolation due to the language barrier that exists for some of the population and common biases that can affect those who speak with an accent. In Central Los Angeles, 2016 census data found that 60% of Spanish-speaking households are linguistically isolated, defined as having no adults who either speak English “very well” or regularly at home.
The one city in the U.S. where the language barrier is not a significant issue in commercial real estate is Miami. Since Fidel Castro and Che Guevara overthrew the regime of Fulgencio Batista in Cuba in 1959, Miami has been the prime destination for people from Central and South America with enough money to fear being targeted in times of political or socioeconomic upheaval in their home countries.
It's a far cry from those who journey across the land border between the U.S. and Mexico and seldom arrive with much in the way of financial resources. And it has given rise to a specific set of circumstances allowing Latinos there to prosper in a number of fields, including commercial real estate.
“If you are in Miami and you are Latin, maybe you have a big firm with a lot of money,” said Martin Ferreira de Melo, one of the principals at Miami-based Melo Group. “If you say that you are Latin in Miami, nothing changes. If you go to any other part of the U.S., people want to hide their Latin heritage; they want to blend more into America. Here, you can be American, but you can also be Latino without the [stereotype] of Latinos being poor.”
CREW Miami President Ligia Labrada, who also runs her own construction consulting firm, told Bisnow she can often speak Spanish in business meetings in Miami without anyone blinking an eye. But even just a few miles north, that environment vanishes.
“In Fort Lauderdale, the city just north of us, you can drive around there and go days without anyone speaking Spanish,” Labrada said. “And there is a sort of negative connotation, to a certain extent, if you do speak Spanish.”
The various ways in which primarily Spanish speakers are isolated from business communities outside of Miami serves to intensify the positivity that flows when Latinos, whether employed in commercial real estate or not, see themselves in the industry — such as the Philly breakfast that made such an impression on Perez and Sessoms.
Perez also acknowledged the significance of moments like showing his parents around the refinery site that HRP is currently remediating before beginning construction. In the way he runs HRP, Perez demonstrates the value of having people of color in general in executive positions in the industry, Sessoms said.
“I have a CEO who lets me dream with no limits and lets me show up to work and be my whole self,” Sessoms said. “I know that comes from working for a company that is led by a minority, and that it’s rare to be able to truly be your authentic self. I’ve been in lots of companies and in government, and it’s the first time I can show up and just be Jasmine.”
The magnified influence that each Latino leader has in commercial real estate, as well as the lack of progress the industry has made in bringing Latinos in, means that Latino leaders themselves don’t have much trouble seeing the impact of their influence. Perez, for example, will have the opportunity to watch HRP’s new capacity-building program bear fruit.
“Through Build Latino, we have the ability to train somebody today who’s on the younger side, and three or more years out, they’ll have the ability to eventually work with us, through whatever relationship that may be,” Perez said. “That is very, very rewarding.”