A Wider Net
- Jul 29, 2013
Real Estate’s Talent Wars Throw Spotlight on Diversity Initiatives
By Paul Rosta, Senior Editor
When Lamont Blackstone began attending the International Council of Shopping Centers’ annual convention in Las Vegas in the 1990s, he noticed only a few other African-Americans in the vast expanse of the Las Vegas Convention Center. A decade and a half later, the Westchester County, N.Y.-based consultant finds that people of color are somewhat better represented at RECon and other major industry events. Nevertheless, there is still a long road ahead. “Even accounting for the fact that the numbers of minority professionals in the real estate industry—and specifically retail real estate—have increased, there is still a lot of work to do,” said Blackstone, chairman of Project REAP, a real estate training program for minority professionals.
Executives charged with fostering an inclusive talent pool in the commercial real estate industry agree that commercial real estate has made noteworthy, if still modest, progress toward diversity. Blackstone himself exemplifies the growing presence of African-American, Hispanic and Asian-American entrepreneurs who are making their mark on the industry.
At a time when commercial real estate faces fierce competition for the best and brightest, forward-thinking companies understand that diversity is vital to their success, argues Gregg McCort, Project REAP’s executive director. All industry specialties “are looking for talented people. They couldn’t care less what color or what ethnicity they are,” he said. “They need smart, talented people, because this industry isn’t getting younger; it’s getting older.”
Nevertheless, characteristics that marked commercial real estate for much of its history—largely family-owned, male and white—pose deeply embedded challenges to change. Project REAP estimates that minorities account for only about 1 percent of commercial real estate professionals nationwide.
Further complicating efforts to broaden the industry’s talent pool, job reductions during the Great Recession decreased opportunities across the board and caused promising candidates of every background to set their sights on other careers. “There’s plenty of diversity out there,” said Martha Bayer, global director for talent strategy and diversity for CBRE Group Inc. “The net just needs to be cast more widely.”
Women as a group also continue to represent a minority in the industry, although they have made some significant strides. That is evidenced in the growing number of women in high-profile leadership roles. On Jan. 1, for example, Lauralee Martin became the first woman to take the reins of a major U.S. service firm when she was appointed CEO of Jones Lang LaSalle Inc.’s Americas region. To succeed Martin as the firm’s global CFO, Jones Lang LaSalle hired Christie Kelly, previously Duke Realty Corp.’s executive vice president & CFO. In April, MaryAnne Gilmartin was named to president & CEO of Forest City Ratner Cos., and now leads the metropolitan New York City region for Forest City Enterprises Inc.
“Men are becoming much more comfortable with women in senior-level positions,” said Susan Hill, a Houston-based senior managing director for HFF L.P. and the national president of CREW Network.
Yet significant obstacles remain to greater representation of women, especially in leadership roles. Senior professionals speculate that the approach to career development many women take often hampers their advancement, as well. “Women tend to want to be recognized for their service, where men are better about going in and talking about what they’ve done for the company,” Hill added. “We’ve got to do a better job of going in and making that ask.”
Educational programs are providing avenues for talented minority professionals to enter the industry. Project REAP—the acronym stands for Real Estate Associates Program—sponsors training programs that each draw several dozen young minority professionals. So far, Project REAP has organized sessions in New York City, Cleveland and Los Angeles, and a debut program in Dallas is on the radar for 2014. Backed by a broad coalition of companies and industry associations, the program draws people with eclectic professional backgrounds and often with advanced degrees.
University programs, too, are important conduits. At the University of Southern California, the Ross Minority Program in Real Estate trains participants to work in development in underserved communities. More than 700 people have completed the program since 1993, and its alumni are having an impact on their communities. Vanessa Delgado heads the development team at Los Angeles-based Primestor Development Inc., which specializes in developing retail projects for Latino neighborhoods.
Such success stories are encouraging, but the pace of change remains slow. “What isn’t taking place as quickly as we’d like to see is that young people aren’t moving up the ladder into management roles as much as we’d like to see,” remarked Stan Ross, founder of the Ross Minority Program and chairman of the USC Lusk Center for Real Estate. Minority professionals sometimes feel that striking out on their own offers a faster path to success than joining a company. The perception reduces the pool of minority professionals available to the industry, he argued.
Effective as training programs can be, experts say that broadening the industry’s talent pool requires more than recruitment. “Just going out and hiring someone is not going to do it,” declared Brown. “Diversity is the mix. Inclusion is how you make the mix work.” Creating affinity groups for women and people of diverse ethnic backgrounds provides valuable networking and mentoring opportunities. Forest City gives those groups an added mission by soliciting ideas about strategy. And the company is preparing for its next generation by identifying women and minorities who demonstrate leadership potential.
Forest City further pursues diversity in its vendor pool, and supports nonprofit groups that serve communities where the company invests and develops. To be successful, such initiatives require the support of company leadership, Brown maintains.
Assigning a senior manager to oversee diversity efforts provides practical benefits while sending a message about the company’s commitment. Bayer points to her own newly created position as an example. She is charged with refreshing CBRE’s multi-faceted diversity efforts, which range from sponsoring in-house affinity groups and programs like Project REAP to vendor diversity and community service.
In tandem with commercial real estate’s own diversity initiatives, the industry’s customers have an opportunity to contribute to the cause, Blackstone suggested. “One of the things I think would be helpful would be for the corporations (that are) major users of real estate space … to be aware of it as a strategy that could benefit their organizations,” he said, citiing Wal-Mart Inc. as an example of a major corporation that has welcomed minorities on its in-house real estate team.
Along with persistent, comprehensive efforts to make the industry more inclusive, time may prove to be diversity’s best ally. As more professionals of varied backgrounds continue to make a mark on the industry, it will increasingly mirror the nation’s own diversity, McCort predicts: “When you get enough people with enough credentials and they’re impressive, you will see incremental progress.”