Over the past two years, the state of race relations in the US has been a hot-button-topic for many Americans young and old. In 2015, the Black Lives Matter movement helped bring to the forefront discussions about police interactions within minority communities. Everything from the stop-and-frisk campaign to the highly controversial shootings of unarmed black men were both in questioning. In 2016, Trump’s highly controversial presidential campaign provided a platform for racism, misogyny, xenophobia, and protectionism.
So it’s no surprise that reporters at The Real Deal decided to write a lengthy article titled “Real Estate’s Diversity Problem” in their January 2017 issue (https://therealdeal.com/issues_articles/real-estate-diversity-problem/). The article begins by comparing the commercial real estate industry in New York City lack of minority representation for client facing roles to LA's film industry, due to its dearth of minority nominees that procreated the #OscarsSoWhite protest.
When I decided to pursue a career in commercial real estate, I noticed that there was a stark contrast between residential and the commercial employment base. In my opinion, residential real estate has been open to diversity because there are a lot more qualitative factors involved as people tend to buy or sell with brokers that they share similar interest, religions, or childhood experiences. Whereas in the commercial real estate space there's more quantitative factors involved. The measurement of one's ability to close all have to be vetted before an individual is given the reigns to sell, buy and or finance commercial properties. Yet, this club may not have much involvement with the minority community and it reflects in their hiring practices. However, many pension funds have a large representation from the minority community.
According to The Real Deal, commercial real estate tends to be a “rough-and-tumble world, where the industry can seem tone-deaf at best and impenetrable at worst”. They also mentioned that a rookie residential broker can start out by placing a few of his/her clients into rentals, whereas commercial deals take a lot more time to put together and there is a huge luck factor that comes into play.
In comparison to other prominent and financially rewarding career paths like medicine, law, and finance, commercial real estate has yet to implement diversity recruitment programs within their hiring practices. Studies have shown that the implementation of diversity programs help recruit and retain a companies diverse employment base. For example, The National Football League implemented the “Rooney Rule”, which is a policy that requires teams to interview minority candidates for head coaching and executive roles. Yet, within the institutional real estate world where capital flow from international investors is at its highest peak, diversity hiring remains on the back-burner.
Before transitioning into the commercial real estate industry my biggest fear wasn’t being a minority it was starting a career within an industry that is behind on the diversity trend and lacks a track record of successful minorities. Prior to my endeavor, I researched high and low for successful minority investment sales broker and only found one by the name of Mr. Michael Blunt. As a result, I believe there are several reason why talented minorities do not gravitate towards a career in commercial real estate: lack of mentorship, severe lack of success stories, and the commission structure. As highlighted in the article, “the commission-based structure in brokerage is an explanation for why the commercial industry fails to develop a pipeline of talented minorities and women, and while women have forged a path to prominent roles in the industry, the same has not been true for minority men”.
In a recent study entitled The Commercial Real Estate Diversity Report, some alarming data was compiled to further illustrate the vast diversity gap in the CRE industry.
The study estimated that a hiring pool of college educated individuals b/t the ages of 25 - 64 years old consist of:
• White women: 39.5%
• White men: 36.7%
• Black, Asian or Hispanic: 23.8%
Among CRE Senior Executives (13,773 jobs)
• White men: 77.6%
• White women: 14.1%
Minorities
• Hispanic men: 2.9%
• Asian men: 1.6%
• Black males: 1.3%
• Each minority female category: hold less than 1%
Among CRE Mid Level Managers (47,844 jobs)
• White men: 68.9%
• White women: 16.8%
Minorities
• Hispanic men: 4.7%
• Black males: 2%
• Hispanic Women: 1.9%
• Asian men: 1.8%
• Black Women 1.7%
• Asian Women: 1.1%
CRE Professionals (61,073 jobs)
• White men: 58.5%
• White women: 21.6%
Minorities
• Asian men: 4.4%
• Hispanic men: 4.2%
• Asian Women: 3.4%
• Black males: 2.4%
• Hispanic Women: 2.0%
• Black Women 2.0%
Look, It’s no secret that the commercial real estate industry has an issue with diversity, especially when it comes to minority males and females. I am no MLK or Mr. X, but c'mon CRE get with the program. Many other industries have already recognized the need and benefits in hiring a diverse team and are making proactive strides to address this issue. As a novice blogger, I am personally committed to championing diversity. I will now don my cape and become the “Diversity Super Hero” I was destined to be! By the power of Greyskull, I promise to use my power of persuasion to expose underrepresented individuals across all genders and ethnicities to the commercial real estate industry, as well as encourage various institutions to implement new diversity-focused hiring practices. Up, Up, and Away!!!
