In 2016, one year into my graduate studies, I wrote my first article for PERE, where I shared how I intended to break into the sector. Four years, countless intense interviews and a ton of hard work later, including almost three years in brokerage, and I’ve just broken in. This summer I accepted an offer to be an associate in the investment group at the real estate business of US insurer Northwestern Mutual.
While I’m delighted by my progress, I can tell you it has come against barriers – many of which a naïve overconfidence growing up as a student, college athlete, military man and inner-city citizen had me unprepared for. My earliest experiences seeking access to this sector made me realize how it would be harder for someone of color. Although global in its activity, I found the sector to be, in fact, a small, homogeneous and exclusive community based on relationships. This realization influenced me to suspend my studies for a while to focus on networking.
My first job in real estate did not come without tribulation. I received little guidance, my performance was harshly criticized and, at times, I was casually uninvited from business development meetings with potential clients. I voiced concerns by developing an action plan with seniors, but still felt alienated.
Then came a snapping point: a prized assignment to value a large senior housing estate for a private equity giant was assigned to me, only to be stripped from me within 24 hours and handed to a white man who had just graduated from college. I despaired. Credit to my then employer, which acted immediately on my subsequent request to transfer to another office, where I received the mentorship and guidance I was looking for.
I saw the experience as covert racism and decided to take action by creating a diversity taskforce to host diversity-related events, and be involved in recruitment and retention processes and policy.
It is from these experiences that I see there absolutely is a case for positive discrimination in private real estate. It is a consideration-forcing mechanism that counteracts both unconscious bias and a lack of social network. It allows qualified yet diverse candidates exposure, access and a fair chance at an opportunity in this hitherto closed industry.
Reshaping social norms
There is a wide belief that investment performance surmounts social responsibility. There are also beliefs that ‘hero ideologies’ can adulterate a talent pool to ensure equal employment opportunity. This perception is antiquated, as it confuses diversity with charity and only rewards exceptionalism.
In any event, nepotism has run rampant in the industry. So-called ‘legacy’ hiring has not been viewed as unpalatable. And yet, there is a substantial amount of evidence-based research that proves that diversity enhances financial performance, rather than hindering it. Conversely, nepotism perpetuates systemic inequality and a false sense of accomplishment or belonging.
The solution is simple and private real estate should not be afraid of it. Reshaped social norms on positive discrimination in the form of holistic recruiting initiatives are essential to achieve the diversity targets many are now calling for, but perhaps do not know how to achieve. I would like to hear of a better way to achieve a diversity of experience, opinion and background in addition to the traditional barometers of educational or professional accomplishments.
Both public and private real estate investors are increasingly regarded on a variety of measures that include sustainability, social impact and societal benefits, in addition to returns.
But there is a missing link between these measures and the positive discriminatory recruiting practices I mention and that is the broadening acceptance of senior white men in the sector.
The penny will drop everywhere when it drops for them. By the next time I write for PERE, I hope that has become more broadly realized.