After Three Years of Promises Is CRE Any More Diverse?
A promise is a promise.
In 2020, real estate companies made significant commitments to promoting diversity, equity and inclusion (DEI) in the wake of nationwide protests, sparked when a Minneapolis police officer murdered George Floyd. They hired DEI officers, formed task forces and surveyed their staffers. They pledged to change the industry, their suppliers and the profile of their own teams.
Three years later, their initiatives remain in place for the most part, and several have grown. But by the numbers, progress in diversifying the industry has been slow, negligible and, in some cases, still impossible to measure.
While women make up about half of the nation’s workforce, the share of women in commercial real estate was already stuck between 35 and 37 percent from 2005 to 2020, according to a study conducted every five years by the network group Commercial Real Estate Women (CREW). And after 2020’s bold statements, the share of women at some of the largest brokerage firms has changed fairly little.
At CBRE (CBRE), women represented 33.5 percent of the brokerage’s global workforce in 2021, about the same as the 33.2 percent of staffers that were female in 2020, according to CBRE’s corporate responsibility reports. Within CBRE’s U.S. workforce, women represented 32 percent of CBRE’s employees in 2020 and 2021.
Other brokerages posted similar metrics. The percentage of women in JLL (JLL)’s global workforce remained at 35 percent from 2019 to 2021, while at Savills, it rose from 45.5 percent in 2020 to 46.2 percent in 2021, according to annual reports from both companies. Colliers (CIGI) posted a single percentage point decline; the percentage of women working for Colliers worldwide dropped from 40 percent in 2020 to 39 percent in 2021, according to Colliers’ global impact reports. (Colliers CEO Gil Borok said Colliers’ staff fluctuates every year).
Men, particularly white men, continued to dominate executive level positions (though improvements in the brokerages’ C-suites were more marked.) The share of women serving in manager positions or higher levels at Colliers rose from 32 percent in 2020 to 34.2 percent in 2021 worldwide. About 21 percent of top global management at JLL were women in 2021 compared to just 18 percent in 2020. And 22 percent of C&W’s executives were female in 2021, compared to 19 percent in 2020.
JLL hopes to grow the number of women in its top two management levels to 40 percent by 2025, according to a spokesperson for the firm. Colliers has a similar goal of 40 percent of its workforce and management being women by 2025, and also to grow the number of minority staffers, though Borok declined to disclose that number.
But brokerages, as a whole, have a way to go before their staffing reflects the broader U.S. workforce, where roughly 46.8 percent of employed people identified as women, 19.3 percent identified as Black or Asian and 18.5 percent of people identified as Hispanic in 2022, according to the U.S. Bureau of Labor Statistics (BLS), though those who identify as Hispanic in BLS data may be of any race.
The panels and the new diversity departments did prompt a few companies to begin tracking more data, with the hopes of marking future improvements.
C&W reported a diversity breakdown of its U.S. workforce for the first time in 2021 to hold the firm “accountable” as it works towards its goals, according to C&W’s 2021 environmental, social and governance (ESG) report. Out of all U.S. staffers, 52.4 percent were white, while 30 percent of C&W’s board of directors were racially or ethnically diverse in 2021. CBRE’s U.S. workforce remained 74.4 percent white between 2020 and 2021. At JLL, the percentage of white U.S. staffers dropped from 67.5 percent in 2020 — the first year JLL tracked that information — to 66 percent in 2021, according to JLL’s global sustainability report.
In a 2021 forum that Commercial Observer hosted, Chad Tredway, who was then the head of real estate banking at JPMorgan Chase, put it this way: “What gets measured, gets done.” JLL used the mantra for their gender pay gap report for its UK offices. But not every firm collected the racial or ethnic breakdown of their staffers, or had enough data to report.
Avison Young sent out its first global survey of its employees in October 2021 to gather a baseline of responses on the firm’s “diversity dimensions,” according to the company’s 2021 ESG report. Savills’ 2021 annual report includes a breakdown of the gender of its employees globally, but the firm doesn’t track the racial demographics of its North American office, according to a Savills spokesperson. Colliers lacked enough data for “attributes other than gender” because not enough of its employees disclosed that information, according to Colliers’ 2021 global impact report.
While more data is better than none, the pace of progress in both reporting and diversifying commercial real estate’s ranks has been slow. But the real estate industry is not known for its speed, said Wendy Mann, chief executive officer of CREW.
“We’re not done by any measures right now,” Mann said. “But, for an industry that has been slow to change, I think that there has been such a great commitment.”
Numerical breakdowns by race and gender also fail to tell the full story, because hiring brokers from underrepresented communities requires a strong talent pipeline commercial real estate just doesn’t have, Borok said.
“The general population would like this industry to be some significant percentage of color today, yesterday, tomorrow. I’ll go on record saying that is not going to happen,” Borok said. “There’s a long history of why this industry has been white male dominated. All of the firms, even the smaller firms, are making significant strides to try and diversify their populations on every metric. But the number of qualified people to do that doesn’t exist in a way that can get us to a meaningful percentage in the near term.”
Most brokerages have established programs to tackle the pipeline problem, and a growing number of firms have taken aim at a major barrier to entry for brokers without the connections, or the cash, to get started: commission-based compensation.
Savills established its Junior Broker Development program in 2020, and will train and pay 15 young brokers $65,000 this year, said Ann Duncan Inman, chief strategy officer and chief diversity officer for Savills. Most early-career professionals rely on their own money (or their parents’ cash), or borrow their pay from an older broker in what’s called a “draw.”
Savills’ 2023 class is 78 percent diverse and has the opportunity to move into multiple career paths at Savills after the program ends, not just brokerage, Duncan Iman said.
“Diversity is not just gender, and race and ethnicity — it’s expertise too,” Duncan Iman said. “Part of what we do with the program is give them rotations around various functions within the organization, and some of them find their calling in different places.”
Avison Young started its own compensation program last year, allowing managing directors to bring in a new broker and pay their salary for up to a three-year period, though a spokesperson for the firm said Avison Young couldn’t provide the current number of participants.
CBRE helped fund a salary to 100 participants of one of its mentorship programs in 2022 and JLL started a broker diversity fund last year to pay young brokers wages for two years, instead of a draw. JLL also offers a networking and training program, dubbed “JLLU,” to all its junior and associate-level brokers that has trained 70 people since it was established in 2022.
And Colliers committed to hiring two or three brokers each year from Project REAP, a.k.a the Real Estate Associate Program, which helps middle-career minority professionals transition into commercial real estate through a training program, said Borok. Those that work for Colliers get paid a draw that is forgivable if they don’t score the commission to cover it, Borok added.
Project REAP also helps Colliers access a pipeline of minority brokers that can be difficult to find, Borok said. Colliers, CBRE, C&W, JLL, Newmark, Savills and some of the city’s biggest landlords have partnered with Project Destined, an educational program that trains high school and college students in real estate. Project Destined trains more than 2,500 students per year, and those graduates have scored internships and jobs at Brookfield Properties, Mastercard, Goldman Sachs and JLL, among others.
C&W also took to 11 historically Black colleges and universities in 2020 to host a commercial real estate bootcamp for students, and the firm looks to those schools to recruit full-time hires, Nadine Augusta, chief DEI at C&W, told CO in September. C&W’s 2021 report does not mention the program, but a spokesperson for C&W said the firm partnered with HBCUs via a career development nonprofit last year.
And for applicants that make it to the interview room, Avison Young requires its hiring teams to include diverse interviewers, and mandates that every talent pool has diverse applicants at the corporate level, said Joan Skelton, global director of diversity and inclusion at the firm. C&W also standardized its interview approach in 2021, distributing guidelines to its entire staff and recruiters to ensure that the interview approach is the same for all hires, Augusta said.
Last but not least, the Real Estate Board of New York (REBNY) offers a handful of programs aimed at expanding the ranks of diverse real estate professionals. REBNY offers a paid internship program for City University of New York undergraduates, serving 150 students in its first two years after it was established in 2020. It also selected 24 diverse, early career professionals with leadership training program Coro New York Leadership Center for a six-month training program, per REBNY.
“As a trade association, we do know from our members that they are eager to see the changes, where the workforce will reflect the city in which we live, work and conduct business,” said Yvonne Riley-Tepie, REBNY’s senior vice president of social impact. “When they start thinking about hiring, they’re going to be looking at these interns as a pool of applicants for these jobs.”
But what happens when those professionals want promotions, not internships? So far, the C-Suite has remained overwhelmingly white and male.
Out of all of CBRE’s senior executive level managers, 67.7 percent were white men in 2021, though that’s an improvement from 70.6 percent in 2020. Women represented three of nine board members at Savills in 2021. Only 27 percent of executives at C&W were racially or ethnically diverse in 2021.
Most firms touted their employee resource groups (ERG) as ways to both create community and help staffers move up the corporate ladder.
“We’re creating a sense of belonging, a sense of community and a safe place for our associates and employees to basically have a voice,” said Juan Bueno, U.S. president and principal for Avison Young and executive sponsor of its Hispanic ERG Conexión. “Specifically to Conexión, we talk about career advancement and mentorship. And each ERG would have their own goals.”
Most brokerages have ERGs for women, Black, LGBTQ+, and occasionally other minority groups, but memberships range widely. Colliers has 1,095 professionals in all of its resource groups, Borok said, while Avison Young had more than 550 members in its Women’s Network group alone, according to a spokesperson for the firm.
A handful of brokerages also offered leadership programs for those heading ERGs, like at Avison Young, or for emerging leaders, like at Savills. And career advancement programs can be crucial for helping professionals advance, Riley-Tepie said.
“The ripple effect of everything we’re doing here is a win-win,” Riley-Tepie said. “I heard directly from one of our fellows from last year about going back to her firm and bringing the information that she learned to her business resource group, and how then she can help to impact the work of the diversity group within her firm. That trickles out to other members.”
Most executives expected, or at least hoped, that commercial real estate’s commitment to diversity, equity and inclusion would continue beyond 2023 — even amid an economic downturn that may encourage companies to cut back. But investing in diverse hires is a good business practice, aside from it being the right thing to do, Bueno said.
“To us, it’s a business strategy to be diverse,” Bueno said. “Time will tell if in tough times, people decide to cut back on some of these initiatives or not. I will tell you that we remain committed to this because it’s driving our culture and it is giving us dividends.”
Still, brokerages will need to keep their momentum if they expect to see significant change in the face of the commercial real estate industry, Mann said. She offered one key piece of advice that a consultant told her when working with CREW in 2019:
“She said to me, ‘Wendy, the reason that DEI initiatives fail is because white people get tired. So I’m asking you Wendy, don’t get tired,’” Mann said.
“I took that to heart because she’s right.” Mann added. “We can start doing all these things and there’s a possibility that we start feeling like we’re doing everything [and] we don’t see change overnight. … But you have to keep moving forward and you have to keep that momentum. And we have to remember [that] things take time.”
So, commercial real estate executives: Don’t get tired. It’s a steep climb, but the path is there.