Access to Capital Remains a Major Drawback for Black Developers

Despite growing numbers of African Americans in its ranks, commercial real estate remains largely white and male. But ULI has long discussed diversity, especially at the District Council level, says Sonia Huntley, the Institute’s senior vice president for diversity, equity, and inclusion (DEI).

“But what we’re doing now connects the entire organization to a DEI strategy,” Huntley says. “And like many organizations across a variety of industries, a lot of the acceleration of our efforts happened on the heels of the George Floyd murder in 2020. And so the organization really came together, and has put diversity, equity, and inclusion front and center in its overall strategy across the entire Institute, across the Americas region. Just 5 percent of ULI’s members identify as African American, according to one Institute report.

“So, what does that mean? That means … we have a commitment that DEI will be threaded throughout everything we do. So, it’s not just a number of District Councils who educate diverse cohorts of people in our educational programs. It’s not just some of our reports that have an equity component. It’s in every department, it’s in every program, it’s in the way that we do our business, it’s thought about in how we craft our meetings, both at the local level and at the national level, meaning that there will be diverse perspectives, a diversity in terms of moderators, speakers, and panels.”

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Today, African American business leaders point to remaining challenges, including access to capital. But they also underline the importance of the industry in broader conversations.

“The importance of real estate is pretty primary, as a wealth builder, as a vehicle to intergenerational wealth, and arguably the way the wealth gap has gotten as large as it has,” says Adam Weers, chief operating officer of Trammell Crow Co. and a ULI Global Governing Trustee.

To that end, ULI has also stepped up its efforts to attract young minority practitioners. “I think what we’ve recognized as an industry, and certainly ULI has recognized it, is that since we grew up, out of family businesses, very often, if you didn’t learn about commercial real estate at your kitchen table, you just didn’t learn about it,” says Cindy Chance, ULI executive vice president for learning and product councils.

ULI offers an online certificate program aimed at undergraduates, Foundations of Real Estate. In a new joint effort with Project REAP, NAREIT, and Fannie Mae, the development certificate program is linked to a paid internship program with NAREIT member companies. There are more than 100 would-be practitioners in the certificate phase of the program’s first year right now, Chance says. “When we started out the program, we said success would be 25 students. … So now we’re talking about how to expand it.”

Access to capital remains one of the biggest issues facing Black real estate practitioners. “The real estate industry has always needed capital,” says Collete English Dixon, a longtime executive with Prudential Financial, now the executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University in Chicago. She’s also a ULI Global Governing Trustee and member of the ULI Americas Executive Committee. “You’ve always needed money; you needed to either have it yourself or be able to get it from somebody. If most of the money is being controlled by people who don’t look like you and don’t know you, it’s going to be harder to get that money. That has continued to be a sticking point.”

Institutional capital—particularly REITs and private equity—are dominant players today, says Faron Hill, president of Peregrine Oak, a commercial real estate advisory firm in Atlanta. Hill is chair of the ULI Foundation, as well as a member of the ULI Global Board of Directors and a Governing Trustee. “The major challenge is for African Americans, and other groups … who have not had the exposure [to such investors], or the benefit of the experience of interacting with institutional capital. And institutional investors have found a challenge in bridging that gap,” Hill points out. “I think there’s more of an appetite today to help smaller minority developers, or a more diverse group, navigate that particular aspect of the business.”