Countless initiatives have been launched in recent years to address real estate’s long-running and well documented lack of diversity. But their benefits have not been felt equally.
While efforts to hire and advance women and people from minority groups have had modest but tangible impacts on the former group, they have done little for the latter. A 2019 survey from National Association of Real Estate Investment Managers found that women held 16 percent of leadership positions, up from 12 percent in 2017. Meanwhile only 4 percent of male and 2 percent of female executives identified as African American or Asian.
Clearly, the race gap and the gender gap are two different issues in private real estate. Now, as the US reckons with systemic racial inequity and injustice, it is time to stop pretending they are the same.
The hardships women face in the workforce should not be discounted. NAREIM has found that women make up 41 percent of real estate investment management professionals, meaning at 16 percent they are still significantly underrepresented in corporate C-suites. Nor should the work done to remedy that shortcoming be discredited. A 33 percent uptick in two years is impressive. But by bundling those struggles and successes with matters of racial and ethnic diversity, firms can end up overlooking lingering issues specific to minority groups.
Chicago-based manager LaSalle Investment Management, for example, has a diversity and inclusion program. But a 2018 white paper on its achievements – addressing family leave policies, creating a maternity mentoring program and tracking the firm’s gender pay disparities, to name a few – shows women’s issues taking center stage. This also speaks to the key distinction between female employees and employees from minority groups, one of retention versus recruitment.
Women already make up more than half of junior-level management positions, according to NAREIM, so the challenge is keeping them long enough to rise in the ranks. More accepting and accommodating workplaces, along with more colleagues who look like them, goes a long way toward that. Similar strategies might work for non-white employees, too, but first firms must get them in the door.
Persistent socioeconomic divides feed into racial disparities. Real estate, for example, is often an inherited business. Those who set out to work in the industry frequently have a familial background in commercial property ownership or investment. In the US, that demographic skews heavily white, hence the field’s overrepresentation of white professionals, both male and female. If private real estate is serious about increasing its racial diversity, greater outreach is key.
LaSalle launched a program targeting Black and Latinx undergraduates to do just that. By providing these students with scholarships and an executive mentor, the firm aims to grow awareness of private real estate and build new talent pipelines, primarily to historically Black colleges and universities. It is unfortunate this program is not accompanied by hard targets for hiring more candidates from minority groups. But it is certainly a step in the right direction.
Firms tend to treat underrepresentation of women and minorities as two symptoms of the same disease. But that thousand-foot view blurs key distinctions between the groups. It is time for private real estate to see gender and race as distinct issues and treat them accordingly.