Blueprint: BentallGreenOak’s big push for diversity, Prologis’s next move in logistics, hospitality’s silver lining

Sonny Kalsi's bold plan for improving diversity; the next move for Prologis in logistics; how real estate debt funds survived the early days of covid unscathed; and more in today's briefing, exclusively for our valued subscribers.

He said it

“Although global in its activity, I found the sector to be, in fact, a small, homogeneous and exclusive community based on relationships”

Northwestern Mutual Real Estate associate Nylz Reyes on his experience breaking into private real estate and why positive discrimination could benefit the industry

What’s new?

A hard line on diversity

He has been in the top job at BentallGreenOak for a matter of months, but already Sonny Kalsi is making big waves. In particular, he has pushed through a recruitment rule stipulating 66.7 percent of all new joiners at the $48 billion manager be women or people from minority communities. Furthermore, if this target is missed, then financial penalties will be self-imposed. In an exclusive interview with PERE, published yesterday, Kalsi said the penalties would give the new measure “some teeth.” This forceful approach has private real estate executives talking about the constructive, or otherwise, role of positive discriminatory policy in the sector.

What is your view? Please tell Kalsi’s interviewer, PEI Media senior editor, real estate, Jonathan Brasse, at

Home bound

New covid-19 cases are on the decline in the US, but so are hopes the country’s office market will regain any semblance of normalcy soon. This month, 66 percent of real estate professionals who responded to a national survey from New York-based law firm Morrison & Foerster said they did not expect to return to their offices before the end of 2020; this compared with 54 percent of respondents five weeks earlier. Although 9 percent of respondents are regularly going into the workplace already – a slight uptick from 7 percent in July – office owners and investors should adjust their expectations accordingly.

Closing the gap

Logistics sits atop the wish list for most real estate investors. But the sector has a looming labor issue, as operators struggle to recruit and retain skilled workers. Prologis, one of the biggest industrial owners in the world, is taking matters into its own hands by rolling out a plan to train 25,000 individuals for in-demand logistics jobs by 2025. With 600,000 new job vacancies expected across the industry by 2026, logistics property devotees with the means might consider following Prologis’s lead.

Data snapshot


Neither rising tensions with the US nor the outbreak of a pandemic have dampened the spirits of real estate investors in China, a JLL survey shows.

Trending topics

Trickledown effect

Since the global financial crisis, private debt funds and mortgage REITs have led the pack of alternative real estate lenders. But the two groups fared very differently at the onset of the current recession. The difference? Leniency, or a lack thereof, among big banks. Analysis by sister publication Real Estate Capital found that where listed lenders saw swift margin calls on mortgage-backed securities acquired through repurchase agreements, large real estate debt funds were given leeway to negotiate. A partial repayment of debt in exchange for extended covenant relief was a common arrangement. Real Estate Capital subscribers can read more about debt dynamics here.

A hospitality V?

Could the hospitality sector witness a quicker rebound than expected? There is indeed reason for optimism for one of real estate’s worst disrupted sectors, according to investor sentiment data compiled by capital advisory firm Lazard. Investor interest in hospitality saw an uptick from July to August, making it the third most appealing sector after the more obvious choices of residential and logistics. Gradual easing of lockdowns and resumption of summer travel, albeit within driving distance across parts of Europe, have helped reduce some of the bearish sentiment. As James Jacobs, managing director at Lazard notes in PERE’s upcoming issue, investors could end up finding opportunistic deals, with assets selling at a significant discount to replacement cost and historic dollar-per-key metrics, as well as higher-quality assets that were previously in long-term ownership.

In memoriam

Gerald Hines, Trish Barrigan and Ron Rawald

It has been a dark few days in private real estate following the passing of three of the sector’s leaders. At the grand age of 95, industry legend Gerald Hines left us (full obituary here), passing the torch to his son, Jeffrey. Taken far too soon, meanwhile, were Benson Elliot’s co-founder and managing partner Trish Barrigan, who was just 47, and Ron Rawald (full coverage here), Cerberus Capital Management’s international head of real estate, who was only nine years older. While corporate tributes to the trio lauded their professional achievements, their human sides also received special mentions:

  • “Dad felt his greatest achievement is the team of dedicated professionals who… carry on his legacy of peerless quality” reflected Jeffrey Hines.
  • “I’ve lost one of my best friends,” said Benson Elliot co-founder Marc Mogull.
  • Cerberus’s global real estate head Lee Millstein highlighted Rawald’s “extraordinary ability to make friends with anyone he met.”

Investor watch

This week’s LP meetings

Tuesday, August 25

Wednesday, August 26

Thursday, August 27

Friday, August 28

Today’s letter was prepared by Kyle Campbell with Jonathan BrasseArshiya Khullar and Merle Crichton contributing

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