To read Part 1 of this package, on REITs, click here. To read Part 2 of this package, on brokerage, click here. To read Part 3 of this package, on finance, click here. To read Part 4 of this package, on developers, click here. 

Hundreds of billions of dollars flow through commercial real estate every year, but the people who control the vast majority of that wealth are White.

This has been a truism since the dawn of the modern commercial real estate era in the 1980s. But as the nation’s pension funds, insurance companies, university endowments and the wealthiest among us pump more and more of their money into commercial real estate, a rigorous accounting of the makeup of the people who control that capital has never been done.

Soon after the killings of George Floyd, Ahmaud Arbery and Breonna Taylor, Bisnow wrote an open letter to the industry promising that “our newsroom will be digging even deeper to hold this industry accountable to its collective desire to be a more diverse and equitable industry.”

To that end, Bisnow launched an investigation to try and start doing just that. We looked at the C-suites and boards of directors of 68 companies, which span the nation’s biggest brokerages, investors, lenders and real estate investment trusts, to see how well they reflect the economy they help shape. The numbers are stark.

Of those companies’ C-suites, which comprise hundreds of positions, 93 roles are filled by people of color. Of the more than 690 people who sit on the boards of those 68 commercial real estate companies, Bisnow found 96 identified as people of color, although some private companies’ board makeups couldn’t be confirmed.

Combined, these companies employ more than 1.4 million people. Ten of the companies, including Simon Property Group, Digital Realty Trust and Cresa, have no people of color in their C-suites or on their boards at all.

When excluding finance — the most diverse of the three sectors Bisnow examined, helped largely by insurance companies and banks that have better diversified their ranks in recent years — the percentage of people of color on boards drops from 13.9% to 9.7%. Sixty-three of those executives of color work in the financial sector, leaving just 29 across the 44 brokerage firms and REITs Bisnow examined.

Many of these companies released public statements in the days after Floyd’s death resolving to help balance the scales of racial justice. But nearly six months later, little progress has been made.

“If you look at our website, you see a bunch of White guys standing around,” said Northmarq Executive Chairman Eduardo Padilla, a Latino who served as the longtime CEO of the Minnesota-based mortgage banking firm.

Even though Padilla was a leader of a lender that placed mortgages on apartment properties, many of which are designated as affordable and backed by the federal government, he acknowledged to Bisnow that he failed to diversify the ranks of his company.

“I would say we did a poor job of really actively seeking a more diverse group,” Padilla said in an interview. “Quite often, we took the easier path of hiring from a relatively small field of people that knew a little bit about commercial real estate.”

Northmarq is just one of hundreds of companies that have taken the same path for decades. In dozens of interviews over the past few months, it has become clear that there is no hope for a quick turnaround in the industry. Nearly all of the initiatives companies have vowed to undertake either lack defined goals or timelines, or they focus only on entry-level jobs.

While building a pipeline of talent is important, the industry has put up plenty of roadblocks for people who don’t have the typical pedigree. To be sure, there has been widespread acknowledgment that those roadblocks need to come down, but there is scant evidence of action being taken to remove them.

To read Part 1 of this series, which examines REITs, please click here. To read Part 2, which examines brokerage firms, click here. To read Part 3, which examines real estate finance, click here.

— Bisnow Editors