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CRE's Wage Gap Could Be Hurting Businesses' Bottom Lines

When Savills Studley Executive Vice President Lisa Davidson started out in commercial real estate in 1985, the opportunities seemed endless.

“In the beginning, I’d hear older women talk about the glass ceiling and I’d think, ‘What are you talking about? There’s no glass ceiling!’” said Chicago-based Davidson, who was appointed to the Savills’ board earlier this month. “But as you move up in an organization, and as you become more successful, you start to feel it.”


Although the Equal Pay Act was signed into law 55 years ago, women in full-time work still earn less than men in almost every single industry across the United States. In commercial real estate, women pull in a median wage of $115K, compared to $150K for men, according to Commercial Real Estate Women Network’s most recent benchmark study, released in 2015. That works out to be an average income gap of 23.3%.

Across all industries, women in full-time employment experience an 18.2% wage gap, according to the Institute of Women’s Policy Research, which calculated the wage gap based on figures from the Bureau of Labor Statistics’ 2017 current population surveys.

The gap is caused, in part, by the fact that men outnumber women in the highest-paying jobs. But even women who make it to the top positions in the industry are, on average, earning less than men at the same level.

Average wages over time (CREW Network 2015 Benchmark Study)

“[A pay gap] was the reason I left my first job,” said Schack Institute of Real Estate at New York University Assistant Professor Danielle Lester, who has spent most of her career working in construction and engineering. “I found out a man who’d started at the same time as me, with the same level of experience, was being paid more. I complained about it and was told to shut up.”

The gap is basically the same as it was over a decade ago, according to CREW, but there is renewed optimism about it closing.

Many of the 15 people Bisnow spoke to for this story said if there is ever going to be progress, it is going to happen now, in the midst of the #MeToo movement. 

“I think there is change in the air,” said Jodi Pulice, the CEO and founder of the country’s largest certified woman-owned commercial real estate services firm, JRT Realty Group. “We want it equal, that’s the bottom line.”

Danielle Lester at work in Manhattan

Brain Drain

Diversity at a company is a matter for the bottom line. A mix of voices makes companies more effective, and in many cases, makes for economic gains. This month, a study by analysts at Wells Fargo found that real estate investment trusts with a greater-than-average share of female directors outperformed REITs with male-only boards by 2.3% over five years.

But women said watching men get paid at greater rates and move more quickly to higher ranks is dispiriting, and sometimes means potential top talent will seek work elsewhere. 

“It’s just something that makes you so angry and bitter, that it’s hard to sit and think about,” Lester said, noting she feels she receives equal pay and respect now that she is at the university. 

Other women said they have noticed some women will only stay in the industry until the pay gap irritates them so much they move on.

“In property management, there is a higher percentage of women, but they are always in the lower end,” said The Bozzuto Group Chief Marketing Officer Jamie Gorski, who joined commercial real estate 35 years ago and once worked at a company where women were required to wear dresses.

“You just feel like you cannot be promoted to a higher level, so you see women join and then leave.”

The Bozzuto Group's Jamie Gorski

Gorski said her own success has been because of the inclusive environment at Bozzuto, which has been named a top company for executive women, as well as the mentoring she has received from the company's leaders.

CREW Network CEO Wendy Mann believes firms need to address the issue of pay disparity in order to recruit and retain top talent.

"How will companies keep the best and brightest women if they aren't paid equally and fairly?" she said.

Under Pressure

Globally, pressure is mounting for companies to make changes.

In October, the U.K. arm of Lendlease released data on its internal pay gap, an early response to the U.K. government's requirement that companies with at least 250 employees reveal earnings figures or potentially face fines.

At Lendlease, women are paid an average of 19% less per hour than men. Around 80% percent of the firm’s highest earners are men.

At Time Equities, a management committee is now evaluating pay rates to look for discrepancies, according to Director of Sustainability Maya Jaber.

She said the firm plans to develop its own parental leave policies, in order to create a “secure” work environment and to attract young talent. The company is privately owned and will therefore not publicly reveal any findings from its review.

But she said her personal experiences prove the pay gap is very real.

“I’ve looked at where I sit, and at males that do my job in other organizations, they make double what I do … In many meetings, I am the only woman,” Jaber said. “I’ve worked in an organization where my boss kissed a married woman on the lips just because he could.

“I think the next movement is here," she added. "Women need to stand together and fight and propel each other up.”

Savills Vice Chairman Lisa Davidson, visiting a client's headquarters in a jet.

The Meritocracy Myth

While many in different sectors of real estate work for a salary, most brokers earn money entirely through commissions. Some women said that model means they are not subject to the pay gap; brokerage is often referred to as a meritocracy.

What brokers earn is based on the business they bring in, freeing them to set their own agenda.

“I realized very early on I did not want to sit there and beg for a raise when no one realized I deserved one but me,” said Eastern Consolidated Senior Managing Director Adelaide Polsinelli, who began her career at an all-woman brokerage in 1985.

“You have more power and more control over your destiny [as a broker],” she said. “You can work as hard as you like and there’s no limitation, there is no glass ceiling." 

In practice, there are barriers that can prevent women from getting brought on for lucrative deals.

A junior broker, for example, may be relying on someone above her to decide what slice of the commission she will take home. Securing work also depends on a broker’s relationships, access and his or her own ability to open doors.

And while it is far from impossible for women to form those relationships, it can be difficult.

“[Commission work] should be the great equalizer, but it’s more nuanced than that … The owners and the developers are all men,” Davidson said. “It’s human nature to hire people that you have something in common with and with whom you feel comfortable.”

With few women in power, it is primarily men deciding who gets what, and where the money will flow. 

“The conventional wisdom is that women are more risk-averse, so they don’t want commission-only positions. I don’t buy it,” Ackman-Ziff Managing Director of Investment Sales Marion Jones said.

“I think women typically calculate their risk levels pretty intelligently … [But] women entering the field need to see more female executives before they will make the gamble to go commission-only."

The Bozzuto Group's Julie Smith

The Slow, Complex Rise To The Top

While there are development firms in New York City owned and run by women — including L&L MAG, Heritage Equity Partners and Himmel + Meringoff — the shortage of women at the most senior level of real estate is undeniable.

More than half of the 15 developers and owners with the largest New York City portfolios have either one woman in their highest ranks or none at all, The Real Deal reported earlier this year.

The women Bisnow spoke to said that urgently needs to change.

More women in high-income jobs will push their median wage closer to that of men, and will help shift the overall culture of the industry.

“There has been a focus generally about getting women on boards, but we know getting them on boards isn’t enough,” said Ariane Hegewisch, the program director of employment and earnings at the Institute for Women's Policy Research, a think tank based in Washington, D.C. 

There is significant research and evidence, she said, that shows when women are in middle and senior management, women face less bias. 

“It is unbelievable the level of confidence and strength when there are other women and minorities in the room,” said JRT Realty’s Pulice, who has closed $5B in leasing and sales deals over her career. “If we are waiting for the men to make change, it’s not going to happen.” 

CREW’s study uncovered what it calls an “aspiration gap.” Men, CREW found, aspire to the top jobs at a greater rate than women. Of the 2,182 respondents surveyed, 40% of men aspired to the C-suite, compared to 28% of women.

The largest subset of women, 47%, were shooting for roles at the senior vice president and partner levels, according to CREW.

Bozzuto Group Chief Administrative Officer Julie Smith said there is sometimes no healthy pipeline of strong female talent at companies, so when it comes time to appoint someone to a top job, there are few women in the race. 

“You want to have a CFO in the making for a decade,” she said.

The problem is the all-important professional development decade is when people are having families. The work of raising children still largely falls to women.

Commercial real estate companies need to make policy changes to make it possible for women to keep working when they have children, Smith said. 

“A lot of women opt out in their 30s when they are really are gaining valuable experience that will position them for those future leadership roles ... because they can’t imagine how they will shoulder it all,” Smith said.

“They need advocates in the workplace to say, ‘No, stay in! We’ll figure it out.’”

Sonny Kalsi at a NYSAREN event March 13, 2018

Time's Up?

“Women and minorities getting equal treatment in the workplace is generally driven by white men, that’s the group that it has to be important to,” said GreenOak Real Estate founder and partner Sonny Kalsi, former global co-head of real estate at Morgan Stanley. "What’s completely unacceptable is an employer that does absolutely nothing."

Monitoring pay rates is not enough, and companies need to create policies that support the advancement of women, Kalsi said.

Ultimately, fixing the problem falls to the entire industry, sources said, and it is something companies need to fix in order to hold on to top talent.

“I’m hopeful we are on the cusp of a transformation,” CREW's Mann said. “People are not going to accept companies where they don’t see gender diversity and commitment to equality anymore. Partners are going to demand it. Clients are going to demand it. 

“It’s not a 'women issue’ or a ‘man’s issue’… it’s a business issue.”