Diversity problem in CRE
Some of y’all not gonna like but just want honest responses. It has to change. Trying to come up with solutions
Why does CRE lack diversity? What can be down to solve this issue? Even when candidates are qualified why are they overlooked? Do minorities really have a chance to make it to executive positions in CRE?
Real estate is a small and often incestuous business, which means more overt use of the good old boys network. It's also extremely capital intensive, which means groups that are already less likely to be wealthy are going to be even more underrepresented.
It can be fixed by people within the industry making a concerted effort to hire more women or people of color, and not just hire your friend's kid. Doesn't change anything overnight, but eventually you see those groups more adequately represented at upper management levels, which means at the very least that now the old boys club includes minorities.
It's also a question of institutional will. Brokerages aside, most real estate shops don't hire people without some experience and they don't hire very many people at all in general. When you're only hiring one or two junior folks a year it's easy to excuse the homogeneity of the people you're hiring. When you hire 1,000 analysts at a go at a bank, it's easier for a lot of reasons to make and keep a commitment to hiring diverse candidates.
By design, the first members of the ruling class of our country were white landing owning males who were Christian. Probably not by coincidence, this demographic is still largely represented in the real estate industry today. I mean think about it, our last president is a real estate developer... However, it has become an increasingly socially inclusive industry over time and will continue to as the industry institutionalizes and develops.
There's a confluence of factors that drive the lack of diversity (historical govt policies, generational business, culture or "fit", socioeconomic barriers, late to institutionalize, etc.) I don't think there's a bunch of old rich white guys sitting around plotting on a scheme to keep women or ethnic minorities out of the business but naturally, any domain a collective group of people control will be a reflection of their (cultural) preferences that best serve them and their progeny. That's who owned land and up until the post-war period before real estate started being owned for leased-investment purposes. Most commercial real estate today is still privately-held and you can probably guess who owns it.
It is no doubt the best time to ever be in the industry as a minority or someone from a resource deprived socioeconomic background. I'm two of those and I've made out just fine. In my decade of plying this trade, there's been only ONE single time or place where I wasn't welcomed because of who I am or where I came from - I was a buyer of a property and the asset was in the south and owned by a dinosaur, to say the least. So be it.
If you can create outsized value for others (however that might be - I made people money from my first day on the job and still do - this is a good place to start), you will always have a shot to pull up a seat at the table because we're all commercial creatures at the end of the day.
I'm a first-gen HS and college graduate from a low income, immigrant family. I currently work at a $3B+ AUM REPE firm and want to share some of my experience. I found my passion in real estate early in undergrad. I quickly realized the odds were stacked against me because I had no connections to the industry, so I did my best to replicate the path my affluent and white peers take to get internships and jobs (networking, talking about certain things).
Looking back, I might not have always been the most qualified candidate for a position (GPA was on the lower end), but I believe whoever hired me saw a lot of potential so they took a chance. I hope my responses to your questions help provide some insight from my experiences thus far.