Commercial real estate has long been considered an industry that is lacking in diversity. However, an increasing number of commercial real estate companies globally are taking steps to improve the statistics on diversity, equity, and inclusion (DEI).
“DEI is a very simple idea and most agree it is the right thing to do, but making it happen is more complicated,” Sonia Huntley, senior vice president, diversity, equity, and inclusion, at the Urban Land Institute, said during a January webinar. The webinar was moderated by Lisa Gordon, newly appointed chief operating officer for the City of Atlanta and a ULI global governing trustee.
ULI recently joined a coalition of real estate associations to conduct the industry’s first global DEI Survey. The Institute’s own statement on diversity, equity, and inclusion is “to pursue unrelenting efforts to shape the built environment toward diverse equitable and inclusive communities,” according to Huntley.
For the DEI survey, a total of 175 responses were received from firms, representing more than 435,000 full-time employees and more than $2.4 trillion of assets under management, according to Erin Green, managing director at Ferguson Partners, which conducted the study. It focused on understanding both internal corporate DEI practices, (such as hiring, retention, training, and inclusivity) and employee demographics of gender and race/ethnicity, and how breakdowns change across seniority and type of job performed. Gender questions included male and female employees, although nonbinary or non-conforming professionals may be included in future studies as data availability increases.
In total, 92 percent of all firms surveyed currently have some type of DEI initiative—roughly half with formal and half with informal programs. The study also found bigger companies are more likely to have a formal DEI program compared to smaller ones and that nearly 85 percent of senior-level executives in North America are white. The importance of increasing morale and employee retention was also noted by respondents.
“These points to me are really important as a DEI program shouldn’t be solely about having a more representative workforce, although that’s clearly a critical component,” Green said. “But they should also be about cultivating a workplace that is supportive and inclusive, and where people feel that sense of belonging.”
Reisa Bryan, global chief operating officer at Nuveen Real Estate, said some aspects of the study did not surprise her, including the fact that 58 percent of employees of the firms surveyed are men.
Bryan is more concerned about the statistics regarding senior-level executives. The study shows that racial and ethnic diversity among executives at the board level remains low at 13 percent of employees, with 15 percent at the executive management level. Professionals of color account for just 16 percent of senior leadership.
“We just have to do better, and we can do better,” Bryan said. “We all need to take personal accountability for that.”
Nuveen has created a DEI strategy that incorporates gender diversification as well as metrics and accountability, said Bryan. The firm works with Project Destined and REEX to reach high school students.
Nuveen also targets students at historically black colleges and universities who are majoring in engineering, math, finance, and economics since most of the colleges do not offer formal real estate programs, Bryan said. The firm focuses on recruiting students with those majors since they have skills that are transferable to commercial real estate, according to Bryan. She also stressed the importance of mentorship and sponsorship when it comes to retaining employees of color which she said is most important.
“If individuals don’t see people that look like them, they will not stay,” Bryan added.
Washington, D.C.,-based Summer Haltli, senior vice president of strategic management and sustainability at real estate investment trust FCP, said her company has found success in setting key targets. They began working with an independent consultant four years ago to develop an action plan to increase diversity in their organization. It includes aiming, as a company, to represent the population nationwide of people receiving degrees in business.
Hiring an outside consultant to help increase diversity is something many firms have done, according to Gordon. FCP also offers training on unconscious bias and partners with organizations to increase their recruiting pipeline.
“I would say the biggest thing that has made the most impact for us on the recruiting side is we require at least one diverse or underrepresented candidate to be in that final round interview process,” Haltli said. Additionally, Haltli noted that building an inclusive culture is key, and starts at the top: “The definition of leadership has changed. We’ve seen during the pandemic that having empathy is important, and recognizing people have real lives outside of work is important. Hopefully this is a change for the positive that will enable people to grow in their careers.”
When it comes to the overseas market, Mihail Tonchev, senior portfolio manager at Kempen Capital Management in Amsterdam, the Netherlands, conceded Europe is “lagging behind” North America when it comes to diversity, equity, and inclusion. The continent has a great deal of work to do, he said. The study showed that 14 percent of members of boards of directors in Europe are women.
“This is materially the worst of all the main regions,” Tonchev said.
However, he mentioned that ensuring gender pay equity is an area of strength in Europe, and said the picture also improves when considering other parts of the continent. For example, in Norway, where Kempen is headquartered, the country passed a law that mandates women must make up 40 percent of all corporate boards.
Where recruitment in Europe is concerned, the outlook is brighter for women who are junior and mid-level professionals, making up 55 percent and 53 percent of employees, respectively, Tonchev pointed out. For women who are at senior levels, the number drops to 23 percent.
While countries such as Sweden offer generous parental leave, Tonchev said his company is using more of an all-encompassing viewpoint when it comes to family-friendly policies.
“What we try and do at Kempen is … a lifecycle approach towards the way we interact with it, with employees,” he said. “There’s a lot of practical things in there, whether it’s childcare, flexible working, or language training.”
In Europe, he said people also discriminate based on accents. This is something his company aims to help improve through diversity training. The bottom line, the speakers say, is that striving for diversity is to everyone’s advantage, and now is the time to act.
“I personally feel what gets measured gets done,” Bryan said. “By the way, now that we have this data, we can no longer say we don’t know what the benchmark is.”