These Developers Have Built Up America. Their Executives Are 93% White
This piece is the fourth in a series of articles 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 the article examining REITs, click here. To read the article examining CRE brokerages, click here. To read the story examining real estate finance, click here.
Developers, more so than any industry outside government, are responsible for the way the modern world looks.
The biggest development firms in the U.S. between them construct hundreds of millions of square feet of new buildings a year. Millions of Americans live in the apartments they have built, work in the offices they have designed and shop at the retailers they agree to do business with.
Companies like Trammell Crow, Hines, Tishman Speyer, CIM Group, Related Cos., Alliance Residential and Greystar are privately held, and they aren’t subject to the same level of scrutiny as their publicly traded peers. But these firms are hugely impactful on American life, and they are still run by a higher proportion of White men than other sectors of the commercial real estate industry.
In another installment of Bisnow’s series examining racial diversity among the leadership at commercial real estate’s largest firms, we analyzed the leadership of 24 of the nation's largest private commercial and multifamily development companies. Combined, these companies have developed billions of square feet, over a million apartments and employ tens of thousands.
These 24 companies have identified 435 people as top-level executives, and 31 are people of color, or just over 7%. That compares to 11% of major brokerage executive teams Bisnow analyzed in the fall and 15% at major commercial real estate finance and equity firms.
Among these two dozen developers, just two had more than two people of color at the executive level, and half had none at all, according to Bisnow’s research, which included internet and records searches and confirmations from the companies themselves. Only a handful of the people of color identified as leaders at their respective firms work directly in a development, investment or C-level role.
"The bottom line is that the development business in this country has always been controlled by White males," said Collete English Dixon, the executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University. "It's largely managed to be very self-contained while it engages with the world."
The development business remains a mainstay of the American economy — in 2020, U.S. developers oversaw $193.B in commercial and multifamily starts, according to Dodge Construction data. It has been able to generate billions in generational wealth for the people who inhabit its upper echelon, all while largely avoiding scrutiny for its overwhelming Whiteness.
"Even with everything that happened last year, I guarantee you, real estate companies aren't recognizing they have a diversity problem, because what they're doing works for them,” said Bay Area developer Charmaine Curtis, a Black woman. "If you don't recognize the problem, you don't think that there's anything you can do better. But the problem is profound."
The influence of these developers is more than merely economic. Developers reshape cities, decide who lives and works in their buildings, and are frequently influential political figures and donors on the local, state and national levels. Their attitudes tend to be myopic when it comes to understanding diversity, University of Southern California Lusk Center for Real Estate Chair Richard Green said.
"One of the things that's depressing about real estate meetings is that I see a sea of White male faces," Green said. "It's boring. It's been a business that's been a relationship business, which means who your daddy is has mattered more than how good you are. I think that's starting to change some, but not rapidly enough."
Two of the largest developers in the country, Hines and Trammell Crow, have between them developed more than 1B SF. The two firms were founded in Texas, but they have built skyline-defining office projects and tens of thousands of housing units all over the country, in cities from Phoenix to Detroit, Atlanta to Boston.
Hines’ executive suite is 16 people and combined they oversee more than 3,400 people in the U.S. and nearly 5,000 around the world. On its website, the company offers a six-point "Diversity Road Map," under which the company promises to "expand policies that support inclusion, build diverse leadership teams, and evaluate actions and progress."
“As a firm, we are committed to our values of an inclusive and diverse community and culture. It cannot be said enough: we condemn discrimination and injustice in all their forms, and we are committed to the necessary and important conversations about racial injustice and the Black community in America," Hines CEO Jeff Hines said in a message posted on June 3, 2020, to the URL hines.com/equality. Hines' father, Gerald, founded the firm and his daughter, Laura Hines-Pierce, works there as an executive.
When Chiang Ling Ng was named chief investment officer in charge of Asia on Jan. 19, she became the lone person of color and third woman on its executive committee. Hines declined to comment for this story.
Trammell Crow, which is owned by CBRE, has an eight-person leadership team, only one of whom — Adam Weers, a Mid-Atlantic Business Unit principal — is a person of color, the company confirmed. Weers has been appointed the company’s chief operating officer, effective April 1.
"One of our most successful means of fostering diversity and inclusion is through the ongoing support of TCC employee network groups, including the Diversity & Inclusion Initiative, the Women’s Network and our Ambassador Program,” a company spokesperson said in a statement. “TCC also has an 18-person DEI (Diversity, Equity, and Inclusion) steering committee, chaired by Adam Weers ... with members across the U.S. and the UK.”
Hines and Trammell Crow might have made incremental progress this year, but many of their peers at the apex of the development industry have made none.
Alliance Residential Co., Greystar and Wood Partners were the three biggest developers of U.S. multifamily properties in 2018 and 2019, according to the National Multifamily Housing Council. In those two years, the trio started construction on more than 40,000 homes for renters.
Greystar has five top-level executives, Alliance has seven and Wood Partners lists 29 on its website. All of their combined 41 leaders are White.
Greystar, which owns roughly 152,000 apartments and, after its acquisition of Alliance’s property management arm, will manage nearly 700,000, has a diversity statement on its website, though it hasn’t been updated since early 2020.
"Greystar takes pride in the breadth of diversity of its workforce," it states. "The importance of ensuring that diversity is prevalent throughout the wider organisation is not lost on Greystar’s senior management."
Greystar declined to comment for this story, but it confirmed there are no people of color on its executive team. An Alliance spokesperson said at the company’s senior vice president level, 8% are people of color and 11% are women.
“Diversity/Equity/Inclusion/Belonging is an area of focus for Alliance. We’ve made advances in some areas, but there is still much work to be done,” Alliance Senior Vice President of Associate Engagement Sherida Colvin said in a statement. “Our company’s size and scope has changed. The June 2020 sale of our property management division to Greystar reduced our employee count from nearly 4,000 to 360, and shifted our business entirely to multifamily development, construction and acquisition. These are career fields that will benefit from focused efforts on engaging more gender and racial diversity.”
Wood Partners didn’t respond to multiple requests for comment for this story.
One of the reasons progress in diversifying major developers is hard to come by is these companies look at their peers and see they aren’t falling behind, said Priyanka Dwivedi, an assistant professor at Texas A&M’s Mays Business School who has studied diversity at U.S. businesses.
"The executives essentially look out to a small group, their industry, and see what's happening in terms of representation," she said. "They see a lack of representation, similar to what they're doing. There's comfort in that. As long as they're doing what others are doing in the industry, they feel like it's OK."
That dynamic isn't unique to development or even real estate, she said.
"What's unfortunate is that the needle hasn't really moved,” Dwivedi said. "It reaches a kind of threshold, and there's no further progress."
Development is a particularly hard real estate sector for people of color to break into, partly because it is hard for anyone. Even well-established developers offer a difficult environment for people of color looking to establish themselves in the development business, English Dixon said.
"Because of the long-term cycle of development, developers don't usually have huge staff of people between the flush and the lean years, even if they're big," she said.
Combined with a mindset at the top that overlooks people who don't look like themselves, these limited opportunities form strong obstacles against people of color rising to executive levels.
"If you don't have the diversity at the top of the company, it is very, very hard to kind of break through," English Dixon said.
Atlanta-based IDI Logistics, which owns approximately 58M SF of industrial space and has developed approximately 185M SF in its 30-year history, has only seven members of its leadership team, all of whom are White. When asked if the company has any diversity goals or metrics, a spokesperson sent back a brief statement.
"We have a broad goal to support a diverse and inclusive work environment but haven’t established specific metrics as a goal at this time," the IDI spokesperson said.
LA-based CIM Group, which describes itself as “a community-focused real estate and infrastructure owner, operator, lender, and developer,” has one person of color in its 13-person leadership team. Soon after George Floyd’s death, the company posted a statement supporting Black Lives Matter. The company also has a diversity statement on its website.
“At CIM, we maintain a focus on nurturing, expanding and promoting diversity, equity and inclusion in all aspects of our working lives,” the statement reads. “We firmly believe that our diverse backgrounds and points of view enable us to function collaboratively and make a positive difference in communities.”
In June, CIM Group backed out of its acquisition of the 869K SF Baldwin Hills Crenshaw Mall, one of Black LA's economic engines, a move that was driven at least in part by a coalition of more than 150 community organizations, civic leaders, faith representatives and former elected officials that engaged in an advocacy campaign.
RED Development, a Phoenix-based developer that has built and managed shopping centers across the Midwest, owns about 9M SF of commercial space. Its five-person executive team has no people of color on it.
"RED Development’s diversity initiatives are applicable — but not limited — to our practices and policies on recruitment and selection; compensation and benefits; professional development and training; promotions; transfers; layoffs; terminations; and the ongoing development of a work environment built on the premise of gender and diversity equity," a RED spokesperson said in a statement.
While companies like RED count only leasing and development executives within its inner circle, many developers have broader definitions of executive teams, and those companies drive up the industry diversity average.
Mill Creek Residential, the sixth-largest developer of multifamily properties in 2019 and fourth-largest in 2018, according to NMHC, has two people of color on its 25-person executive team: its vice president of human resources and head of planning and design.
“We recognize the diversity, equity and inclusion challenge that we have today,” Mill Creek President and CEO William MacDonald said in a statement.
He pointed to the December release of the company’s first Environment, Social and Governance report, which discloses company-wide demographics. The company said in the report that 76% of management is “non-minority,” while less than 53% of the company’s 932-strong workforce identifies as White.
Washington, D.C.-based real estate firm Madison Marquette, a major developer of mixed-use properties, has 22 people on its executive team, two of whom are people of color: the heads of its legal and IT departments, a company spokesperson said.
Finding top-level executives of color at the industry’s largest firms who are directly overseeing day-to-day or financial operations is nearly impossible.
"For a lot of these companies, it's a bit of a conundrum, because realistically there might not be a pipeline" for bringing Black people and other people of color into the upper ranks, said Beatrice Sibblies, a Jamaican-American developer based in New York who specializes in affordable housing.
"It's not like you can just hire a headhunter and steal them from your competition," she said. "They're not at your competition either."
Most of the major developers with more diverse leadership are based in the country’s largest cities.
Global developer Tishman Speyer has 69 people it counts as executives, most of whose titles are managing director, nine of whom are people of color. The company is multifaceted, including divisions that handle leasing, corporate real estate, investment management, property management, acquisition and development. The New York-based firm has developed about 23.7M SF of commercial space in North America.
“Tishman Speyer is proud of its longstanding commitment to diversity, and its workforce today reflects the global communities and cultures in which the firm does business,” Tishman Speyer said in a statement through a spokesperson. “The firm is deeply committed to making diversity and inclusion a daily reality whereby its community is built on the diversity of its people and the inclusivity of its culture.”
Tishman Speyer CEO Rob Speyer was one of the executives who signed the Open Letter From the Leaders of the Partnership for New York City in early June expressing outrage at Floyd’s death, the impact of the coronavirus pandemic on communities of color and systemic racism as a whole. The letter’s signers also promised that they “are reasserting our commitments to diversity and inclusion among our boards, executive leadership and our entire workforce.”
Chicago-based Sterling Bay, which develops large-scale projects in emerging markets, has a 36-person leadership team, five of whom are people of color.
“Together with our employees, partners, and neighbors, we strive for innovation in everything we do, including creating an industry-leading approach to the advancement of diversity and inclusion in commercial real estate,” a Sterling Bay spokesperson said in a statement.
New York-based Related Cos. has a C-suite of 20 executives, three of whom are people of color: Chief Operating Officer Kenneth Wong, head of construction Emad Lotfalla and partner Gopal Rajegowda.
“As an industry, we have a lot of work to do,” Related CEO Jeff Blau said on a Bisnow webinar shortly after George Floyd's death. “Our industry has historically not been very mixed. You can go to a Real Estate Board of New York dinner and look at the composition of the group and I would guess it's 80% White males, maybe more.”
Blau, whose company owns more than 55,000 affordable housing units nationwide, thousands more luxury apartments and is the co-developer on the $25B Hudson Yards megadevelopment, said during the webinar that he believes inequality is one of the greatest risks to the country's future. He added business leaders like himself need to focus on improving the situation.
“As a company, we have historically been all about hiring the best and the brightest talent, to completely be colorblind or other-group-blind. And unfortunately that has resulted in more of the same,” Blau said. “If the industry is not producing the types of people that we want and the diversity we want in our organization, you can’t solve that in one day. We need to work with our industry and schools to make real estate an attractive and a welcoming place for everybody … That's a generational change.”
Change might be coming, but Black developers, many of whom found a place in the industry by starting their own companies rather than rising a corporate ladder, say they aren't optimistic that the pace will be quick.
"Many companies, publicly traded companies, have diversity departments now, and diversity executives, so there's more consciousness in trying to diversify some industries," Urban Core Development CEO Michael Johnson said. “But that's generally not the case within the development community.”
Johnson specializes in mixed-income residential development projects. Over the last 25 years, his companies have been among the largest Black-owned businesses in the San Francisco Bay Area, having completed over 3,000 housing units and several mixed-use projects.
"The tech industry here in the Bay Area is constantly under scrutiny to improve their diversity, but there's no accountability for private real estate businesses," Johnson said. "So change will only be through select individual companies that attempt to do so, meaning we'll see minuscule gains over the next two decades."
Sibblies said that without some creative thinking about a nontraditional pipeline to get mid-career or entrepreneurial hires, there isn't going to be much movement on increasing diversity numbers among major developers. Another of her peers has a more extreme solution.
“How do you fix it? Implement quotas," said Curtis, the founder of Curtis Development Group. “There is a reason that quotas work, since for a long time because it was the only way to make people do the right thing.”
U.S. corporations are more aware of their lack of diversity than ever before, especially since the rise of the Black Lives Matter movement last summer. Developers were keen to issue statements about increasing diversity in their companies, though specific action plans are scarce.
More than half of the companies Bisnow examined issued public declarations of some kind about diversity, including statements on their websites, signing open letters on the subject or simply posting messages on their corporate Twitter or Instagram accounts.
The companies affirmed their commitment to inclusivity, either by posting statements to their websites or, in some cases, donating money to relevant nonprofits. Trammell Crow touted its DEI steering committee and pledged support to social justice organizations, such as a $1M donation to the NAACP Legal Defense and Educational Fund and $1M to the National Urban League. Hines’ CEO personally pledged $100K to the National Urban League.
None of the developers have committed to the establishment or operation of a supplier diversity program, which would entail doing business with smaller minority-owned, women-owned or veteran-owned entities, outside Trammell Crow’s parent company, CBRE, which started such a program in October, vowing to spend $1B with diverse suppliers in 2021 and $3B within five years.
“Supplier diversity allows us to make an even greater contribution to the long-term economic stability of our communities,” CBRE Chief Responsibility Officer Tim Dismond, who was chief diversity officer at the time, said in a statement announcing the program. “Our commitment will directly benefit underrepresented businesses and in turn, those businesses will elevate the people and areas where they are located by creating sustainable jobs and tax revenue.”
A Trammell Crow spokesperson confirmed the developer would participate in CBRE’s initiative.
Without specific, targeted programs, the relationship-based nature of the development business keeps inequality baked into its financial structure. The wealth gap between White and Black Americans means that the vast majority of people with enough money and connections to cobble together a development are White.
"There are a lot of things you can do in this industry that don't require you to have significant amounts of capital to get started," English Dixon said. "Development isn't one of them. Lack of availability to capital is a deterrent for becoming a developer, no matter what demographic segment you're in."
If the industry is to successfully diversify, it will need to overcome decades of discrimination. Because of how White its ranks still are, it is still seen as an inaccessible career path for people of color. The industry’s insular nature keeps it that way.
"Commercial development is such a complicated profession, involving skills developed over years, as well as through relationships that take just as long," Regent Partners Director of Development Services Keith Mack said.
Mack, a Black man, is responsible for overseeing development projects for the Atlanta-based company. Since 1994, he has executed more than $700M of educational, residential, office, mixed-use and transit-oriented development projects.
Unless young people of color are proactively introduced to the industry, they will never evolve to become the next generation of developers, Mack said. He said he was fortunate to be introduced to CRE right out of Texas Christian University by a fellow alumnus.
"The introduction opened up a world of me learning about real estate," Mack said. "I stayed in the industry for 20 years and really got a solid foundation."
But Mack is an exception and not the rule. To change the makeup of the development industry, companies have to want to do the work and begin from the ground up. There is little evidence that is happening so far.
"It takes that extra step — many extra steps — to reach out to colleges and universities to recruit young talent among people of color, and introduce them to the business," Mack said. "That's where it has to start, and it's only a start."