Commercial real estate has often been accused of being a bastion of white, male privilege. “Historically, there have been two routes into property – investment banking and surveying,” says Tania Azad, partner at Bohill Partners, a consultant at real assets executive search firm Bohill Partners. “There were a lot of days out at the cricket and members clubs – jobs for the boys.”
But times are changing. Women now represent 15 percent of executive positions in real estate investment management, according to the 2021 NAREIM Diversity & Inclusion Survey, up from 12 percent in 2016. Meanwhile, minorities – both male and female – also represent 15 percent of those in executive positions today, up from just 10 percent four years earlier.
Evidence of diverse talent reaching the most senior ranks is particularly encouraging. Indeed, 30 percent of senior level professionals are now women.
“It is clear, from the survey, that there is a mandate and momentum for DE&I to be a priority within the real estate investment management industry,” says NAREIM chief executive Zoe Hughes. Indeed, almost all respondents – 96 percent – said that now have formal diversity and inclusion policies. Meanwhile, 71 percent have allocated dedicated human resource to their approach, up from just 37 percent in 2017.
An industry-wide commitment to DE&I seems apparent and is reflected in the slew of women that have been appointed to top jobs in recent years. The world’s largest asset manager, the world’s largest sovereign wealth fund and the largest US pension plan are just some of the major institutions to have put women in charge of their real estate businesses.
Anne Valentine Andrews was promoted to global head of BlackRock’s real assets business in April this year. In October 2020, Mie Holstad was promoted to the newly created role of chief real assets officer at Norges Bank Investment Management, responsible for the Government Pension Fund of Norway. Just three months earlier, Sarah Corr was made head of real assets at CalPERS.
They are not alone. Other significant appointments include Sophie van Oosterom as global head of real estate at Schroders, Kim Hourihan as CIO Americas Real Estate at CBRE Investment Management and Joanne McNamara as head of Europe at Oxford Properties. At Nuveen Real Estate, meanwhile, Louise Kavanagh, Reisa Bryan and Carly Tripp, hold the positions of Asia chief investment officer, chief operating officer and global chief investment officer, respectively.
“There is, absolutely, more diversity around the table today, when compared to a decade ago,” says Tripp. “I think employers are now embracing diversity and inclusion and working harder than ever before to drive change in their organizations.”
“The industry is now much more focused on addressing its lack of diversity. It’s in the boardroom and is here to stay,” adds Andrea Carpenter, director of Women Talk Real Estate. “One of the key drivers is the recognition that a sustainable business both economically and socially can’t be achieved without a diverse workforce.”
Carpenter adds that covid has accelerated the industry’s desire to consider social as well as financial outcomes. “If we are going to address these social outcomes properly in the built environment, then it needs the voices, experience and expertise of a wider range of people.”
Indeed, senior diverse talent is hot property in real estate today. “When you recruit diverse talent at a more senior level you are going to have to pay a premium,” says Nuveen’s Bryan. “And even though we are happy to do so, their existing employers will often counteroffer to retain them.”
“We are certainly seeing intense competition for those high-caliber hires, who also happen to be women,” says Azad. “For example, there are only a handful of top female real estate CFOs, and they are hugely sought after right now. In those instances, the pay gap is reversed. Everyone wants them but they are also being well compensated to stay where they are.”
But these headline-grabbing appointments belie an ongoing real estate recruitment challenge. The entry level diverse talent pipeline is strong, although Carpenter believes there is still more work to be done to broaden the appeal at a school and university level. She also believes that technological innovation that is disrupting the real estate sector will force firms to seek out individuals with a different set of skills and talents.
But a bottom-up, organic approach, of course, takes time and firms are often reluctant to hire outside of the industry. “When we are taking a brief, a client will typically say they are willing to look both in and outside of the sector,” says Chantal Clavier, partner and head of real estate for Europe and Africa at Heidrick & Struggles. “But around 70 percent of the time, they still opt for someone with strong technical expertise and some leadership skills, rather than strong leadership skills and only limited technical experience.”
Clavier says it is vital that real estate firms don’t think that hiring diverse talent is the end goal. “As a good employer, you need to ensure you have created a culture that embraces that diverse talent, and makes them feel welcome,” she says. “No-one wants to feel like the odd one out, even if management says all the right things. And if they don’t feel included, they won’t stay.”
Closing the pay gap is also key, of course. Clavier believes this is an area where there has been progress. “No entity wants to be that bad business that is called out for underpaying women,” she says. “I think companies have made shifts, internally, to even out base salaries, at least. Equally, I think women have found a voice. They are more comfortable saying that they know they are underpaid and that they want to see that rectified. I have seen a real change there and I hope it will continue.”
The Skills Workshop
The Skills Workshop is a program of free, virtual workshops designed to support students looking to start a career in the investment and savings industry.
The initiative was founded earlier this year by Rachel Green, founder of #TalkAboutBlack and director of institutional sales at Nuveen, in partnership with the CFA.
It comprises six months of hosted events, aimed at university-aged students to help increase success at various stages of the application process. In particular, it aims to address under-representation of ethnic minorities and students from socially and economically deprived backgrounds, across a number of industries, starting with investment management.
“We are passionate about creating a more representative industry, where, regardless of ethnicity or socioeconomic status, you can fulfil your potential,” says Green, who founded #TalkAboutBlack in 2018 with a group of senior Black asset management professionals focused on mentoring, education, thought leadership and public speaking to increase opportunities for Black people and challenge the structures that inhibit progression.
The Skills Workshop provides an insight into the investment management industry and training on résumé and cover letter writing and interview technique, as well as a virtual careers fair, featuring 41 companies. Other organizations involved included EnCircle and the Diversity Project. In total, the Skills Workshop is collaborating with over 60 businesses across the industry. “We are incredibly proud that the overwhelming support we have had from the industry, will lead to making a real difference in young people’s lives,” says Green.