CRE's Next Generation: Oak Investment CEO Erik Murray Invests In Black Developers When Other Firms Hesitate
This series asks rising stars in commercial real estate about their thoughts on some of the biggest issues facing the industry, such as inequality, climate change and technology.
Erik Murray is taking efforts to diversify the commercial real estate industry into his own hands.
Murray is CEO and managing partner of Oakland-based Oak Investment Funds, an investment firm growing its record of giving minority developers and opportunities a look when major players don’t.
As a Black man in a business where the vast majority of decision-makers are White, Murray, 38, has focused on giving Black entrepreneurs a chance in an effort to inspire future leaders of color in the big-money business.
“You have to take a chance, go outside your comfort zone, and give an opportunity to a person who may not be formally trained in real estate, who may not have grown up wanting to be a real estate developer,” Murray said. “Because that’s not even an opportunity that’s presented to young Black kids.”
Murray, a Kansas City, Kansas native, studied medicine at the University of Southern California, but was uninspired by his then pre-med track, he said. Murray met a broker after he graduated in 2004, who guided him to a position at Trammell Crow in California in 2005. Under the guidance of several mentors, Murray joined Colliers International where he became the third-ranked industrial broker in his hometown by 2009, he said.
“Once I got into it, I realized what these guys have known for generations,” Murray said. “This is the greatest wealth accumulation game the world has ever seen.”
Murray saw what he believed was culture lacking in the business dominated by firms “named for old White men,” with third- and fourth-generation executives leading based on their last name and relationship to founding partners.
“Many of the legacy real estate brokers, owners and developers continue to recruit from within closed social networks,” Murray said.
Murray’s assessment isn’t off-base. Just 11% of the largest brokerages' leaders are people of color, a Bisnow analysis in November found. George Floyd’s death in May sparked a reckoning on race across the nation, including in the commercial real estate industry, prompting the nation’s largest brokerage firms to increase inclusivity efforts.
However, Bisnow found nearly all of the initiatives companies vowed to undertake either lacked defined goals or focused only on entry-level positions.
Murray rose to leadership positions beginning in 2009 at Kansas City, Kansas-based Point Commercial LLC. He continued his path as principal of Lee & Associates’ Kansas City office for two years before working as director of real estate and facilities at Beacon Roofing Supply, a Fortune 500 company.
Murray then went independent, becoming CEO and managing partner of Oak Investment. The firm, realizing a lack of capital would hinder its ability to compete in the “traditional food groups," focuses on cannabis real estate, boutique hospitality and affordable housing, he said.
“Investment dollars continue to go to the same old projects and same old legacy developers,” Murray said. “Until investment managers, financiers and lenders get intentional about diversity, creativity and equality of opportunity — this problem in commercial real estate will continue to exist.”
Murray pointed to “emerging manager” programs at commercial real estate firms Artemis Real Estate Partners and GCM Grosvenor, which tout inclusivity efforts with training, collaboration with diverse companies and billions of dollars invested. The programs are focused on core institutional assets when they should be eyeing value-add investments that Black developers are coming up with, he said.
“If you’re a capitalist, you should be leaning into Black entrepreneurship and social justice right now, because it’s the right thing to do," Murray said. "But also because it’s what sells."
Last February, Oak announced plans to develop a former Honda dealership at 1540 South Figueroa St. in Downtown Los Angeles into a mixed-use development with a high-rise hotel, retail space and a cannabis dispensary and lounge. Oak bought the opportunity zone project, still in its infancy, for $23.3M.
Oak reached out to Frederick Braggs of Steinberg Hart, one of the few Black partners at a major architectural firm, and from there built a diverse team to build the project out. Partners in the project include Tauro Capital Advisors Director Deryl Deese, another Black real estate leader and USC alum, and George Fatheree, a Black partner and real estate lawyer at Munger, Tolles & Olson.
Oak is working with Damon Lawrence of Oakland-based boutique hotelier Homage Hospitality. Homage operates accommodations where Black art and culture welcomes Black guests, and Murray said Homage has struggled to get investors on board with its vision. Oak is working to get Homage into the ritzy Napa Valley market.
“People would say, ‘I don’t really think about Black history and Black culture when I think about Napa,'" Murray said. "But there are plenty of Black and Brown folks who like wine and like hanging out up there, but don’t yet have spaces where they feel like they can bring their full identity and feel comfortable.”
Partnerships with entrepreneurs like Lawrence are crucial to the building of diversity within the industry, Murray said.
“If we can help Damon Lawrence become a hospitality and hotel kingpin, guess what?” Murray said. “He’s going to make sure that there are five more young Black entrepreneurs starting hotels right after him.”
A major step toward inclusivity in the industry begins with education for a new generation of minority real estate leaders. Awareness of the industry and skill sets needed for success are limited in communities of color, according to Collete English Dixon, executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University in Chicago. Students of color learning about the industry for the first time in college are already behind, Dixon said.
Murray said he sees encouraging signs, with an increasing number of undergraduate real estate development majors, including at his alma mater. USC launched a Bachelor of Science in Real Estate Program in 2015 to complement the existing master’s program, and it recently hit the 1,000-alumni benchmark.
“An important part of my job is making sure that as many other Black kids know that opportunities in the field exist and that our industry needs their creative minds to be a part of these solutions and be a part of building wealth,” Murray said.