The ‘Catch-22’ That Holds HBCUs Back From Being A CRE Feeder System
The commercial real estate industry is aware of its lack of racial diversity, and many of its biggest companies say they are working to grow the pipeline of people of color into the business. But one oft-cited source of potential employees doesn't have the infrastructure to support that pipeline at present — not even close.
A review of current course catalogs from each of the accredited Historically Black Colleges and Universities found that none have a real estate major or concentration for bachelor’s or graduate degrees. Only 26 offer real estate-specific classes for credit, at least four offer non-credit continuing education classes, and two historically Black community colleges offer vocational programs in real estate.
The Hundred-Seven, an HBCU-focused nonprofit, lists three schools as offering real estate programs on its website: Lawson State Community College, which offers a vocational certificate, and Allen University and St. Augustine’s University. Allen doesn't list any real estate programs or courses on its catalog; representatives for the school didn't respond to requests for comment.
St. Augustine’s eliminated its real estate program in 2017, the dean of the school of business, management and technology, Van Sapp, told Bisnow.
“Many of our students are unaware of commercial real estate opportunities,” he wrote in an email.
It comes as no surprise to Jeffrey Molavi, the interim chair of the University of Maryland Eastern Shore’s Department of the Built Environment, that most HBCUs don’t offer real estate programming. Black families have historically been frozen out of the generational wealth-building afforded White households through homeownership and investment in real estate, and HBCU course offerings are a reflection of the perceived pathways to upward mobility in an economy that still carries the legacy of systemic racism.
“Most African American students don't like the sales position,” Molavi said. “And this is my opinion: The sales position is based on the social and economic structure of the country and culture. So they want to work in a place where they'll be recognized and get steady paychecks. So in my opinion, real estate is not very popular among African American students.”
For HBCUs, which have been chronically underfunded, starting new courses is an expensive proposition. The schools focus what resources they have on expanding their offerings in subjects with a clearer pathway to jobs and/or demonstrated interest from incoming students.
“Nothing is free. It costs money to set up courses,” National Historically Black Colleges & Universities Foundation President Ty Couey said. “And then there's always that gamble that students may not be interested. So it's like a Catch-22.”
For HBCUs to establish themselves as an industry feeder system, they would require participation on a wider scale and more consistent basis from commercial real estate companies than the industry has ever demonstrated in the service of improving diversity among its ranks, multiple HBCU alumni who work in commercial real estate told Bisnow.
“I would argue, whatever time, money, resources that you’re committing to Harvard Business School or Wharton or whatever place you think you’re mining superior talent for your company or industry, if you were to try and do the same thing with an HBCU, you could probably get similar results,” said Michael Banner, president and CEO of Los Angeles LDC, a nonprofit community development financial institution.
‘We Need Them Involved’
The University of Maryland Eastern Shore, a rural HBCU that has had a construction management major since the 1980s, is partnering with a local developer to offer a handful of students a chance at internships beginning this fall. The firm, Davis Strategic Development, is building out new administrative offices for UMES in the town of Princess Anne, said co-owner Bret Davis.
DSD previously established a similar program at nearby Salisbury University, through which it trains upward of nine students a year in commercial real estate. That program already produced one permanent employee for Davis: the company’s chief financial officer, Shawn Hardesty.
Plenty of HBCUs have business schools and finance programs, both of which provide skills useful for roles in commercial real estate. Those schools often partner with private companies for recruiting purposes, including internship placements.
Howard University has held virtual recruitment events with JLL and Cushman & Wakefield, Senior Vice President Debbi Jarvis previously told Bisnow. The university also more recently entered into a relationship with the nonprofit Project Destined real estate training program.
“Through this program, Howard students who are eager to learn the fundamentals of real estate have the opportunity to meet with executives and gain real world experience,” Jarvis said in an email to Bisnow. “Additionally, through the Howard University School of Business, our students have access to real estate courses as well as professional development opportunities.”
Commercial real estate companies are among those who have partnered with HBCUs, but in much lesser numbers than other industries like accounting, law and energy, representatives for multiple schools told Bisnow.
Elizabeth City State University, a school in northeastern North Carolina that had 242 students in the 2020 graduating class, has one or two students a year on average that express an interest in commercial real estate, ECSU School of Business and Education Dean Joy Smith said. The school partners with companies on an ad-hoc basis for internships; in some cases, responding to a business soliciting interns, and in others, cold-calling a company in which a student has expressed interest.
“My guesstimate would be that something like 90% of businesses respond positively [to cold calls or emails],” Smith said. “Unless businesses know something is coming down the pike that would make an internship difficult … Generally, companies are really happy to partner with us, and then we work on placing students in worthwhile projects.”
The Atlanta chapter of national commercial real estate organization NAIOP established an internship program last year to bring sophomore, junior and senior college students of color into the industry. Spearheaded by Transwestern partner Greg Boler, NAIOP recruited from the city’s higher education institutions, including HBCUs such as Spelman and Morehouse colleges, and placed a handful of students into internships at Transwestern, Atlanta Property Group, Regent Partners, Colliers, JLL, Ryan LLC and Cousins Properties. Neither Spelman nor Morehouse responded to multiple requests for comment.
Transwestern hired one of those interns for a permanent position, said Boler, who develops warehouses in Metro Atlanta, Maryland and parts of Pennsylvania and New Jersey. This coming year, NAIOP is planning to expand its outreach with other area real estate companies and other schools.
Boler said he hopes the Atlanta program could be ported to other chapters, particularly in cities where the commercial real estate industry’s demographics are the most mismatched relative to the overall population. More than 50% of Atlanta’s population is Black, yet less than 2% of its commercial real estate industry is Black, Boler said. He hopes NAIOP’s internship program makes a dent in that disparity.
“When you look at the percentages, it's not equitable,” he said. “If you’ve got a population [where the majority] is a minority race ... why is that not reflected in the professional realm? That is the responsibility of the local industry.”
Attention (And Funding) Deficit Disorder
Money is a central issue that HBCUs face when considering expanding their curricula, and chronic federal underfunding has been a common theme since HBCUs were established after the Civil War.
Last April, as part of the Coronavirus Aid, Relief and Economic Security Act, minority-serving institutions such as HBCUs received over $1B in additional funding to help cover shortfalls experienced due to the coronavirus pandemic. But the extra money earmarked for HBCUs is only helping those institutions play catch-up after decades of chronic lack of funding, Couey said.
“You're going to see improvements now, probably in some of the maintenance that has been delayed,” Couey said. “[But] the funds that they're receiving now could be multiplied by 10, and it could still take some 30 to 50 years before the HBCUs would catch up. You're talking about 100 years of catching up. That's a reality that we're living in.”
Should some HBCUs use the opportunity to expand their degree programs for students, real estate likely won't be a priority. Instead, those schools may look to hire staff to expand in fields and industries where jobs will likely be more plentiful in the future, such as technology, energy, healthcare and law, Couey said. Those are fields that prospective students may be more willing to spend their tuition money on as well.
“[Commercial real estate] is like every other field,” Couey said. “There's been a level of redlining [in] virtually every field. That's just the history of the United States. So you have to pick and choose those battles, from an HBCU leadership perspective, where students could get jobs.”
Access to bank loans and other capital to fund commercial real estate aspirations also is a sticking point for HBCUs, said The Myers Development Group CEO Jerome Myers, a graduate of the HBCU North Carolina Agricultural & Technical State University.
“If you don't have a way to go to the bank and get a loan, how are you positioning those folks to be successful at it?" he said.
After falling in love with real estate from taking an elective class at NC A&T, it took more than a decade for Myers to break into the commercial side once he started his own firm, he said. Myers’ company initially flipped residential properties since banks were more willing to give loans under $1M.
Until the real estate industry’s racial diversity more closely reflects the demographics of the country, HBCUs don’t have evidence that offering classes in the field will lead their students to success, Boler and Couey said. It’s the real estate industry’s responsibility to engage with HBCUs and their students if companies want to use those schools for recruitment purposes, but it is reductive to depend on HBCUs alone to fulfill diversity mandates, Boler said.
“I think we’re kind of asking the wrong questions here,” he said. The idea that you need a degree in real estate to strike out a career in the industry “is just not true.”
“When I went to the bank, they said I didn't have the experience,” Myers said, adding that even after 20 years of flipping homes, “I still hadn't met anybody who owned apartments. So when banks told me 'no,' [that] I needed a partner, I didn't have anybody to call.”
“I’m a mechanical engineering major, and I did not know anything about commercial real estate until JLL recruited me right out of college,” Boler said. “It’s more important that we connect the students who might have an aspiration for real estate, but may not have the connections. If you’re doing any recruiting … why aren’t you doing it at the HBCUs?”
Banner said he wasn’t surprised that no HBCU schools have an active real estate degree program as such programs are somewhat uncommon even at non-HBCUs, especially when compared to law or medicine.
“The real estate industry is not an obvious industry of choice, especially if you happen to be Black,” Banner said.
Black people have been celebrated for finding paths to success in other fields, like medicine or law, raising the profile of those careers at HBCU campuses, Banner said. But if commercial real estate companies were to invest resources into HBCUs, it could yield significant results for those looking to diversify the field in a more efficient way than more individualized programs.
“If your goal is to have a more diverse firm or industry because you believe it produces superior results, you can’t get there if you don’t go to where the diverse talent is,” Banner said. “The HBCUs represent one of those places where there is a diverse talent pool.”
In order to produce results at the kind of scale that would actually affect the demographics of the commercial real estate industry, it would take the sort of long-term programs that are more common at the most prestigious business schools in the country, rather than one-time gifts or initiatives that must produce immediate successes in order to keep receiving investment.
“In my mind, it will produce dividends, but you have to sustain it,” Banner said. “It cannot be a one-year, two-year-only effort. Because that’s not going to make a systemic change.”
The Start Of Progress
HBCUs haven’t had a more supportive environment for expanding their offerings in a generation, thanks to the awakening to systemic racism that permeated corporate America in the wake of last summer’s protests against police brutality.
The turmoil from the summer of 2020 has led to a spike in corporate and private philanthropic donations, with HBCUs receiving 31 gifts in excess of $1M last year, according to Higher Ed Dive.
The renewed attention from CRE companies in the past year-plus has already produced results. North Carolina Central University launched a real estate MBA program this fall, in part thanks to a partnership with Walker & Dunlop, as well as NAIOP’s Atlanta internship program.
But as of Aug. 20, NCCU did not list a real estate program on its website, nor are there real estate classes in its course catalog. Representatives from NCCU didn’t respond to Bisnow’s requests for comment.
Florida A&M University does not offer a major or minor in real estate, but it does offer classes in real estate law and finance and has a student real estate club, has a cooperative study program for its students to take real estate classes at Florida State University, and it has established recruitment partnerships with real estate companies like Cushman & Wakefield and CBRE, a spokesperson for the school told Bisnow.
FAMU’s catalog listed real estate courses for years, but until a few years ago, the business school didn't actually conduct them because it didn't have the faculty to teach them, said Shawnta Friday-Stroud, dean of FAMU’s School of Business and Industry and vice president of university advancement.
The business school found two instructors qualified to teach the real estate courses it now offers after a serendipitous hire for another position and the discovery that an existing staff member was qualified to instruct.
“We were fortunate that I had somebody here that wasn’t necessarily looking to be a full-time professor, but wanted to be an instructor and teach as an adjunct and who was credentialed to teach it," Friday-Stroud said. "And we had the courses on the books, so it wasn't a labor-intensive and resource-intensive process for us to restart.”
Since they have been offered, enrollment in the classes has shown that students have a continued interest in that field, Friday-Stroud said. The two most consistently offered real estate courses at the school are Principles of Real Estate and Real Estate Finance/Investment.
Principles of Real Estate is an introductory overview course, offered at eight HBCUs, according to Bisnow’s review of online catalogs. For six of those schools, it is the only real estate-related class in their course catalog.
Thomas Bolen III, now a director of leasing and brokerage at Rappaport, arrived at FAMU with a music scholarship, his sights set on being a member of its famed marching band. He ultimately graduated from the school’s five-year MBA program.
Bolen attended FAMU before it found instructors to conduct its real estate courses, but he grew up around construction; his father has been a general contractor for residential real estate for over 20 years, he told Bisnow. He didn’t recognize CRE as a career option until he attended a talk at FAMU’s School of Business and Industry given by John Crossman, then-CEO of the retail-focused real estate firm Crossman & Co.
“Not really understanding the fundamentals of retail real estate, I didn't understand the concept until it was stated,” Bolen said, adding that once he understood that there were people in control of the stores where he shopped, it seemed cool and nontraditional. The industry’s historic exclusion of minorities wasn’t lost on him either, and in fact added to his interest in the field, he said.
Bolen credits the School of Business and Industry with setting up the talk with Crossman. Those connections are vital for bringing more members of underrepresented groups into CRE, he said.
“That's where the gap is: [real estate] corporations aren't visible at colleges and universities,” Bolen said, which results in commercial real estate jobs continuing to go to those connected to the industry’s relatively small network.
“It's the same people doing business with the same people,” he added.
If CRE really wants to break away from that pattern and find talented, qualified people from different backgrounds, solid relationships with HBCUs are a great place to start, Bolen said.
Friday-Stroud said she is as thankful for the companies that have sustained outreach and connections with FAMU long-term as she is for the companies that are just beginning to build those relationships.
“Our job is to create opportunities that didn't exist when we were coming through school,” Friday-Stroud said. “So for me, it's not as much about why it starts but, when it starts, what do you do with it? If it's something just for the flavor of the month, it will show very quickly that there was no depth and substance.
“Our hope and goal is that when we start relationships with partners, that they become lasting partnerships. But you’ve got to start somewhere.”
UPDATE, SEPT. 2, 3:55 P.M. ET: This story has been updated to include a statement from Howard University.