Diversity in CRE

With all that is going on in the world (crazy freaking year) I was curious to hear what everyone's firms have been doing in order to encourage diversity in this industry? If not much, then what do you think they should be doing? What works? What doesn't? I think this is a super interesting topic and would love to hear others thoughts.

Adding On:
So far this has been fantastic!

Just wanted to add on. The point of this post was to open up a Constructive and Positive dialogue between members of this community. If you have anything negative to say please take it somewhere else. I think we can all agree that everyone in this industry would benefit from it becoming more diverse.

God Speed,

Paul

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Comments (124)

Jun 18, 2020 - 3:00am

Funny you mention this, I've actually been wondering the same thing. I've been curious about:

  1. How have firms been addressing recent events to their employees (Banks, PE, LifeCos, Brokerage, or other aspects like Architecture, City Planning, etc.)
  2. What actionable items have employers taken, if any (donations, commitment to recruiting, etc) vs. the traditional PC message about being "appalled by recent events" but showing limited action.
  3. What diverse recruiting efforts even exist in RE?

I know there is this Diversity Recruiting list that has been shared on the IB forum, but I'm not really familiar with anything similar that exists within the RE industry.

Based on my personal experience, RE seems way behind other industries when it comes to diversity (representation of Black, Hispanic, LGBTQ+, Women, etc.).

Curious to hear what other people have to say and what resources others are aware of...

Jun 18, 2020 - 12:58pm

Here is the issue. At face value we should applaud such diversity, inclusion, etc.

However here is the issue, choice. Plain and simple, what if x% of women don't want to go into HF, or Comercial Real Estate. Women are generally interested in occupations that revolve around people, and less about things. If you look at the nordic countries where you have pretty close to 100% equality between men and women you will find that the distrubtion of jobs is much like you would assume, more women and teachers and nurses, and more men in the Stem fields. This is with men and women getting choose their own professions, with zero barriers to entry.

You can't dictate X percent of women or men go into a certain field. You can't choose jobs for people, like some central planning commitee

Jun 18, 2020 - 1:24pm
C.R.E. Shervin:
You can't dictate X percent of women or men go into a certain field. You can't choose jobs for people, like some central planning commitee

I'm sure there are people out there advocating for quotas, but in my opinion, the correct way to think about this is always equality in opportunity, not equality in outcome.

A quota may get you one more person on your board or into your company, but active outreach, education, and assistance to demographics not traditionally associated with the industry will help open the doors for many others.

Commercial Real Estate Developer

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Jun 18, 2020 - 4:33pm

While there may be "equality" in Nordic countries, it doesn't mean that there aren't cultural/systemic issues about how men and women are encouraged to act or behave which translates to the careers they feel comfortable pursuing. Unless you disagree?

Separately, I do not think filling a percentage quota should be the goal and sole measurement, but it is a helpful data point to better understand other underlying factors, and what could be improved.

What I feel is important, is that we continue to engage with different groups (ethnic, gender, sexual orientation) to make them aware of various opportunities within all industries, specifically CRE since that's within our purview, and make it more inclusive/accepting. The more we speak about the opportunities there are within our industry, create opportunities and pathways, if any individual has an interest, they will not be afraid to pursue it. It will always be within their own decision making at the end of the day, and not some assumption based on gender norms.

I'm sure there was a time when people felt that women would not want to join the police force/armed forces...

Controversial
Jun 18, 2020 - 11:42pm

If x% of women don't want to go into commercial real estate, we need to closely examine why. Real estate is such a lucrative industry that there is no intrinsic reason that women wouldn't want to participate in it, and is an industry which would benefit immensely from increased diversity. Why are women not interested in working in real estate. Is it because they're somehow inherently less fit, less qualified, less capable?

No

It's because there are almost no visible role models in the real estate industry who are women, caused by centuries of property ownership being exclusively dominated by men

Because they find the prospect of being harassed, assaulted, and disrespected by what is essentially a white male dominated fraternal order unappealing.

Because they don't want to work in an office where 9 out of every 10 employees are male.

Because they don't believe they can succeed in an industry where a significant portion of deal-making takes place while engaged in a sport which women for almost the entirety of its existence were barred from participating in (Augusta National started allowing women in 2012.... think about that)

Because they do not feel comfortable having to binge drink with groups of only men multiple days a month for the rest of their career in order to "build relationships".

Because they don't think they're likely to be hired for a job where the decision makers are almost always all males, who make hiring decisions for roles that are often analytical / non-client-facing in nature based off of brain-dead shit-tests like "would I like to get a beer with this person", as if that doesn't inherently cause a cycle of mediocre white fraternity men hiring other mediocre white fraternity men.

Throwing up our hands and saying "well I didn't get any good women / PoC applicants" is a cowardly cop-out. You can't dictate X percent of women go into a certain field, but you can help break down the barriers that systemically discourage them from wanting to participate. Candidly, we've made the industry a stinky pile of dog-shit in the eyes of prospective women candidates, and we've done so for our own benefit for the entirety of human history. It's time for change.

  • Analyst 1 in RE - Comm
Jun 18, 2020 - 11:29am

My firm's CEO is actually a black woman and we have a fund dedicated to first time borrowers/buyers who are non-white in the tri-metro area. We also actively seek out opportunities where borrowers are either women or minorities, but don't strictly do deals with just them.

I think on the whole, CRE needs to do a lot more as it seems we are behind the 8-ball in terms of diversity efforts when comparing to IB or consulting. But my LinkedIn has been full of posts where firms and schools are having conferences and seminars with minority leaders on how the industry can change. We won't see the change anytime soon, but at least the conversation is happening and people are aware.

Jun 18, 2020 - 12:25pm
Analyst 1 in RE - Comm:

My firm's CEO is actually a black woman and we have a fund dedicated to first time borrowers/buyers who are non-white in the tri-metro area. We also actively seek out opportunities where borrowers are either women or minorities, but don't strictly do deals with just them.

That is great to hear that you have diversity at that level! I'm curious, what are the target returns for your (debt?) fund? What does your fund benchmark itself to? Also, how do the rates being charged to those borrowers compare to your benchmark? Are you providing higher rates, market rates, or lower than market rates (to encourage/assist)?

Analyst 1 in RE - Comm:

I think on the whole, CRE needs to do a lot more as it seems we are behind the 8-ball in terms of diversity efforts when comparing to IB or consulting. But my LinkedIn has been full of posts where firms and schools are having conferences and seminars with minority leaders on how the industry can change. We won't see the change anytime soon, but at least the conversation is happening and people are aware.

As for "won't see the change anytime soon", I think that mentality could be challenged.

You could see change soon, assuming people are committed to actionable change and hold themselves accountable. At the end of the day it is on each and every one of us, along with support from our senior leaders, to get behind the cause.

Junior level employees can absolutely leverage their networks to refer/suggest diverse candidates when positions open up at their firms or if they become aware of positions elsewhere.

Scott Galloway has a great weekly email that i'm subscribed to and one of the questions that his colleague brought up was: "Have you personally mentored a black associate?"

While this question was likely intended towards people in more senior roles, as analysts, associates, and VPs, we could also be asking ourselves that same question (though likely more in the context of mentoring undergrads, summer interns, or analysts).

We can also use our position as employees at our firms to challenge our senior leadership by asking them tough questions. Below are some of the other questions that were discussed in Scott's weekly email (though probably easier at some larger institution than smaller funds/boutique firms):

  • Are blacks represented in senior leadership at your organization?
  • What mechanisms and resources are devoted to recruit, retain, develop, and promote black employees?
  • Would your black employees say they are treated and paid equitably? Have you asked them?
  • Would your black employees find your messaging consistent with their experience in your organization? Have you asked them?
  • Is diversity and inclusion isolated to singular events (e.g. Black History Month; when there are massive global protests) or part of a sustained effort and the ongoing fabric of the culture and values of your organization? Is your senior leadership involved and supportive of these efforts?
  • Is your organization actively investing in the black communities in which they are based and operate?
  • Does your organization invest in cultivating black businesses as vendor partners and service providers?

And while the current focus is on Black diversity, which is imperative, this can also translate to other forms of diversity as well (other ethnic group, gender, sexual orientation).

Jun 18, 2020 - 1:12pm
Analyst 1 in RE - Comm:

I think on the whole, CRE needs to do a lot more as it seems we are behind the 8-ball in terms of diversity efforts when comparing to IB or consulting. But my LinkedIn has been full of posts where firms and schools are having conferences and seminars with minority leaders on how the industry can change. We won't see the change anytime soon, but at least the conversation is happening and people are aware.

this may be a controversial opinion on this forum. i'll start by saying i'm a consultant that does a lot of work with CRE clients.

CRE is behind the 8 ball on fucking everything. tech, culture, etc. it does not surprise me one bit that they are behind on diversity as well. there is so much room for disruption imo but i don't have the tech chops to make it happen

Funniest
Jun 18, 2020 - 1:15pm
consluttant:
this may be a controversial opinion on this forum. i'll start by saying i'm a consultant that does a lot of work with CRE clients.

CRE is behind the 8 ball on fucking everything. tech, culture, etc. it does not surprise me one bit that they are behind on diversity as well. there is so much room for disruption imo but i don't have the tech chops to make it happen

I hope it's not controversial. Real Estate thinks CoStar is big data and touchscreen package lockers are big tech. It shouldn't be a surprise that Real Estate thinks hiring a Big 10 grad when everyone else in the office is a SEC grad counts as diversity.

Commercial Real Estate Developer

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Jun 18, 2020 - 11:41am

I have worked, in top consulting firms and have been in this CRE industry for about 7-10 years now, when I look around me in my floor of say 200 employees, all I see is maybe 2-3 men of color, maybe 12 women (mostly executive assistants) , 10 asian employees and the rest are white men! The same proportion is seen in conferences. And when at one point in my past I was tasked to bring in an Analyst (the kid we interviewed was so highly qualified for the job had 2 masters and was from Brown !), the team did not approve of bringing him in, saying he was not articulate enough ! I had recommended to HR, that he was highly qualified and would be a great addition to any group, but unfortunately not our team. I needed team consensus to get that hire. Surely should not be that difficult in New York to get a diverse mix of resumes but it does not translate to the workplace!

Jun 18, 2020 - 12:54pm

seriously...

Commercial Real Estate Developer

Jun 18, 2020 - 12:31pm

Here's a recent article on diversity in CRE: https://ggwash.org/view/78087/commercial-real-estate-has-a-whiteness-pr…

Interest tidbit, the author made a quick count: "the CEOs of the three largest publicly traded commercial real estate firms are all white men. The same three companies have 39 corporate officers among them who are listed as their global executive leadership teams, and only two of them (5.1%) are Black."

Most Helpful
Jun 18, 2020 - 1:13pm

Real Estate is obviously behind the ball when it comes to diversity recruiting, but I do think that this is the last generation of that being the case.

Real Estate is, of course, the ultimate old boy's club and is right up there with politics when it comes to nepotism. Half of the people in this industry are in this industry because their dad was, it seems. Hell, I've felt like a diversity hire at multiple jobs as a straight, white, male simply because I didn't get the job because I or my family knew one of the principals personally like everyone else who was there. I can't imagine what it must be like for a young Black kid to break into the industry.

So much of getting a job in real estate is fit. You can teach any kid to model a deal, or cold call, or stay on top of contractors - but real estate people want someone who will be able to small talk the awkward white debt guys, play golf with the white former D2 athlete brokers, and get whiskey drunk while eating steak and lobster with the white equity suppliers. All of real estate networking is stereotypical upper-middle or upper class white people activities while talking about stereotypical upper-middle or upper class white people things.

All that said, there are reasons to be optimistic. If you look at larger real estate institutions as opposed to the local players, and focus on the people who are 35 and younger, the crowd looks a whole lot different in my experience. Sure, they might all do the same exact upper middle or upper class things, which gets into discussions of class and how that impacts real estate careers, but I have seen an increase in people of all stripes.

Similarly - and again, this is just in my experience - but presumably due the difficulties of people of certain demographics getting into the industry, the minorities I've interacted with in the industry are absolute studs. While there are more mediocre white guys with SEC haircuts in Real Estate than I could count, the women and black people who have made it that I've interacted with are outrageously impressive. I have strong confidence that as these people move up in the world, and hire others like them, that we will continue to see an increase in people from more varied genders, sexual orientations, and skin tones. Also, young people today are not only more accepting of diversity, but expect it. Once boomers aren't the CEOs, improvement will definitely happen.

Now, none of that is to say that nothing should be done to actively encourage progress instead of simply expecting it to happen, and @hard assets" 's list is fantastic. I have personally mentored multiple Black people looking for a career in development (and also women, LGBTQ+, etc.), but I make no assumptions of this even being a moment's thought for my small 12-person organization. You can be sure though that as I, and others, go out on our own it will be a factor.

As a final point, I think that certain cities are going to have an easier time with these changes than others. In mine, for example, I can think of some absolute heavy hitters who are Black- outrageously impressive people with way better credentials than I have and a long track record of success. That may bias me toward optimism for the future, sure, but the hope is real.

Commercial Real Estate Developer

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Jun 18, 2020 - 1:39pm

Amen! Unsurpringly, you're on the nose here, still a lot of wood to chop.

I also want to plug one of my favorite real estate books that is well worth a read in these time; Building Atlanta: How I Broke Through Segregation to Launch a Business Empire. This is Herman Russell's autobiography, and for those who don't know Mr. Russell was a real estate developer who built one of the largest black-owned businesses in the country (in Atlanta), and more importantly was a major bankroller (and source of bail money) for the Civil Rights Movement (particularly Dr. King).

Jun 19, 2020 - 12:56am

Absolutely nailed it CRE. As a second-generation brown guy I had difficulty recruiting even though I had stellar grades and case competition experience. I thought it was because I was brown. Now that I ride a carbon fiber bike, play golf, and drink expensive wine, I realized it was because I was poor, not brown.

Jul 1, 2020 - 4:01pm

Coming from a minority myself and someone who has been in a similar position this is so spot on. Fit is everything at the end of the day and if you're poor you just don't relate to 95% of people in the industry. I think most ppl I know in the industry and who I've interviewed with couldn't care less what your ethnicity is, all that matters is if you can do the work and you can fit in with your team/firm.

Array
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Jun 22, 2020 - 6:21pm

Well said. As a black CRE professional (2.5 years) and a first-generation college graduate, it took awhile to break into the industry. I'd often struggle with networking events. I'd look for prior military guys to find a "common ground" to drive dicussion but that isn't always the case. I had friends who broke into the industry easily because they had mentorship and/or family members to make an introduction.

I'm thankful for where I've gotten, but it is refreshing to to see a community that recognizes there is talent among minorities and increasing diversity among our industry can be beneficial.

Array
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  • Intern in RE - Comm
Jun 18, 2020 - 1:50pm

The industry's view on diversity is lip service. I have years of experience with an MBA from a top tier program. I have been told numerous times for associate, VP, or director roles I am over qualified or under qualified, etc...I usually push back with "test my knowledge and let me complete an exercise for you to better understand my skill set" and the conversation goes no where. It's even more lovely when knuckle head executives say to me during an interview that "I am well spoken" because they expect me to sound like a thug or some other BS. When I have received some offers, I have been low balled so the only option is to walk away. More recently, I have found myself at tiny shops working with incompetent leadership that tell me "we don't need MBA level analysis", "I am too analytical", etc because they are insecure and don't understand certain concepts. It can be frustrating but hopefully one day, we will see change!

Jun 18, 2020 - 1:57pm

Feel free to shoot me a DM. I'm not sure if I can help or not, but I'm happy to try.

Commercial Real Estate Developer

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Jun 19, 2020 - 4:17pm

I'm sorry that you are having trouble recruiting brotha, shoot me a PM if you're still looking. My firm likes MBA's and if I'm reading correctly, you're a POC. We would at minimum entertain your resume, we're in New York btw.

Side note: I would absolutely ruin an interview if someone told me to my mulatto face, that I was unexpectedly so well-spoken. I don't care if it was Starwood or BX, I'd call them out right there because if they're saying that during an interview, imagine what they'll say when you're on the desk.

Jun 19, 2020 - 4:17pm

Ever think it is fit oriented? Diversity aside, fit/personality is the most important aspect IMO... by the final round, everyone there can handle the role quantitatively... at that point it comes down to fit (who can I hang with for 12+ hours a day... which as ppl say may be the "boys club" factor, but is not necessarily prejudice imo... a 40 yr former lax bro hiring a new lax bro analyst over a female/POC is not prejudice). Everyone has lost out on new jobs etc.... ppl rarely looking internally vs blaming an external factor. Cant tell you how upset I've been losing out on a couple roles I loved... in the final round... presumably fit-wise, but this is probably a blessing in disguise Just my $0.02

Honestly, I'm in a more credit/financial RE role/firm in NYC (vs. family developers/smaller groups/etc)... I see minor diversity issues. Sure, there is more white men on the floor/in the industry, but that can be said for all of wall street/ppl seeking Wall Street roles, etc. and is not due to any nefarious desire to only recruit white men. Surely, times will diversify in soon order, but organically. As some ppl touched on, RE is a unique industry, one which a major recruiting factor is a true desire to work in RE (sure everyone has been asked 100x times in interviews) and is also an industry in which a vast majority of participants come from RE families/nepotism (swear my entire office is related to some BSD). In addition, I do believe a part of is a lack of desire to be in the industry vs the lack of access (both racial and gender wise). Especially gender wise, as someone mentioned, there are multiple studies that females seek less stressful jobs and/or more nurturing jobs... IMO ppl must also consider ones desire to work in RE (or wall street etc) in this kind of discussion.

  • Intern in RE - Comm
Jun 19, 2020 - 4:44pm

Yes, I have prior CRE experience and the "fit" stuff is total BS especially in my situation (majority of my friends and folks I hang out with are white). Looking at asset management and acquisition type roles. My goal is to PIVOT to an institutional firm with smart people. In talks with a few shops but everyone is telling me it's going to be a long process of 3 months to a year.

If the frattiest guys or smoke show chicks are getting the job then it's something else. Mind you, I had classes with some of these folks.

Jun 18, 2020 - 2:57pm

The firm I'm currently at does a better job than most, primarily due to it being so large. But in several other roles (mainly internships) I've ALWAYS been the only black dude in the room. A high level of representation across all races is a primary reason why I chose to be at my current firm.

Jun 18, 2020 - 5:17pm

Thanks for the discussion. I think there is more diversity today and there will be more in the future.

I wrote this recently on the OFF topic board. It's particularly in reference to CRE.

odog808:

I've seen more diversity over the past 15 years in commercial real estate, including more (but still few) at the top of organizations.

My theory/observation is the more institutionalized the industry/company gets, the more of a meritocracy it becomes (meaning focused on talent, skill set, education vs nepotism or other factors that don't attribute directly to performance).

However that is part of the transition. The other part is the globalization of capital which we've seen a lot of. This is where the advantage is / was currently going towards Asians, as capital comes from places other than New York/London/etc. I believe how capital "looks" has some impact on the downstream players, especially if the capital is more hands on.

So yes, there has been more diversification, but a lot of the progress has been via the low hanging fruit variety. If more capital to invest in the US came from Africa, there would be a higher likelihood there would be more African or African American workers on Wall Street and in high positions. If you are in a less institutional financial organization with very low diversity of capital, the chances of employee and leadership diversity will be lower. What is "more institutionalized"? My shortest definition would be similar processes and relationships with the largest capital providers (Which often is rooted in large cities with higher education as being important and also diverse populations). Others' definition could differ.

So, I think striving for greater institutionalization, and encouraging investment companies to seek diverse capital (capital is everywhere, how it's allocated differs) would go a longer way than just diversity hire programs. Therefore, examine the "walk the walk" of the company and business reasons why diversity is important than just their "talk." Results will vary.

The downsides of institutionalization includes getting away with a two page IC memo compared to a 60 pager. But that's another rant.

Have compassion as well as ambition and you’ll go far in life
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Jun 18, 2020 - 5:38pm

He has a book have you read it? It's a very good read. I actually know his son quite well.

Array

Jun 22, 2020 - 10:12am
Champagne Sipping:

Bisnow does great article now and then on this subject. It's how I found about one of the guys I want to model my career after Don Peeples. Being black in cre there aren't many guys out there but I've been fortunate to meet up with some black developers and brokers and bankers.

His name is Don Peebles, FYI.

Jun 18, 2020 - 6:11pm

Since WSO is a platform with a lot of folks seeking knowledge and a community and I've been touched in the past by some really genuine people in CRE over the years, I'm going to share some advice I received a long time ago. No matter what your background is, you can work on yourself, strive to be the best, and help others along the way. Early in my career, I reached out to someone because I was looking for a role model or someone who had beat the odds. These words impact me today.

.

.

"Young people today have very little guidance in terms of being taken
"under the wings of". In the office and in business there are many
smart people. But smart people do not equate to wise people and often
they cannot distill how they got to where they are. More often than
not, they are unwilling to share. Unfortunately our parents who love us
very much often have some generational gap or in our cases enough of a
cultural gap that they cannot readily help us on a job and career basis
either. But love them for they gave us the opportunity.

We are unique for we are multicultural! We have the extra burden of
dealing with our race and culture which is far different from being
vanilla American, and then we also have to assimilate well in the
business world that we operate in.

Then we have to deal with how to excel in those circumstances. We must
not and cannot afford the business world to slot us because we are
"Asian" as some mathematical or financial nerd.

When people look at me business wise, I have been able to demonstrate
excellence in Finance, Construction, Marketing, Design, Management,
Legal, and many other business facets. I worked at that to get there.

When they deal with me as a person, they see a fun outgoing gregarious
person with lots of interests and commonalities. I worked at that to
get there.

So be purposeful, have fun, be inquisitive, and excel beyond your
comfort zone. We all like what we are familiar with. But that is never
good enough. Try and attack the areas that you would think of last to
work on. Chances are they are the most important areas you need to
hone. And any work on new areas requires time, effort and some pain.
You do not gain without some sacrifice. It is well worth it at the end.

Then when you have evolved and learned to master some ways of living and working, go out and share it with some others for many too have no
mentors. Make a difference!"

Have compassion as well as ambition and you’ll go far in life
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  • Associate 2 in RE - Comm
Jun 18, 2020 - 6:15pm

I'm black and have worked across a few sectors of the industry. It's actually insane how white brokerage is. I can count very very few black brokers across the commercial sector (office, retail, etc.) I mean, check out Lyon Stahl's team. I haven't done business with them so I'm not trying to bag them, but their team is actually almost entirely white. When you hear of CIM's failed acquisition of the Baldwin Hill mall (one of LA's oldest malls in a historically black neighborhood), these are the exact "people that will bring gentrification" that residents fear (whether they are right or wrong).

There are very few black men and women in the investment community. A little bit more in the lending community from what I've seen.

How many senior leaders of any industry do you know that are black? There are 50 white Jon Gray's to every Robert Smith in the world. There are 50 Paul Graham's to every ... wait never mind, the venture capital industry has the WORST racial diversity.

I can't say I've faced outright racism in the industry but certainly there are times that I feel like an outsider. I'm not sure if I've been passed over to opportunities because of my race, but I will never know.

But certainly when there are not a lot of folks that share your demographic background, things are different in ways that aren't always easy to describe.

Everyone should make an effort to diversify their teams. Not only by hiring from different racial background, but by hiring people from different life, gender, and education backgrounds.

Jun 18, 2020 - 7:05pm

From what I hear from blk ppl one of the hardest things to do is to raise money as a black person in the industry. It's hard already to do it but when your friends and family round is only a round of applause than it makes things substantially harder. I know a few blk guys that find success as tenant rep brokers but there's very few guys in development and private equity.

Jun 19, 2020 - 1:06pm

REITs put a heavy focus on diversity hires which is great. During MBA recruiting, several female classmates were handed REIT jobs and internships that by any measurement other than Bra size, they did not deserve, but my black male classmates did not even get interviews.

A few ideas to improve:

  • If we truly want to promote diversity, attractive white women cannot check the diversity box anymore.

  • I saw my black classmates gravitate to affordable housing and self-help credit unions. Nothing wrong with this path as this field certainly does more for minorities but it's not diversifying the industry just segregating it. More minorties developing Class A properties would open doors to minorty tenants that likely don't even get past the leasing broker.

  • Also, no more broad diversity goal statements. Unless your diversity goal can be measured (>10% of all staff) there will never be accountability for failing to deliver.

“Capitalism: God’s way of determining who is smart and who is poor.” Ron Swanson

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  • Intern in RE - Comm
Jun 19, 2020 - 2:35pm

RE Pirate, you nailed it! I went to a top 10 MBA program, did case competitions in grad school, was involved in the real estate club and networked like hell to land an opportunity and it seemed impossible to land a job at an institutional CRE firm.

Two firms came to recruit at my program and that was my experience. Both candidates who got jobs had little or no real estate experience but looked the part. One candidate had no prior CRE experience and didn't take the real estate class offered...yet he got a job he didn't fking deserve at the largest multifamily owner/operator in the country. During my interview with this firm, they grilled me on technical questions about water falls, various capital stack, difference between multiple, discount rate and IRR, how do you buy a building if no comps, etc while none of my classmates who got offers got asked technical questions (I know this because I asked and I also had classes with some of these folks). I walked out of the interview feeling great because I knew the answers but then the rejections came in. I cried and out of frustration applied to a job at a large tech firm, I received an offer in 4 weeks. I found myself doing tech corporate finance for a couple of years and wanted to get back in CR....I am now back in the industry but it's been frustrating working for small shops. Imagine your colleagues not knowing what a discount rate, s&u, etc mean or you creating a data table or giving additional insights and you are told we don't need MBA level analysis or insulted that you think like an analyst when you want folks to get the details and big picture. It's been pure fkery!

  • Associate 2 in RE - Res
Jun 19, 2020 - 6:45pm

Unfortunately, I think this issue will always be simplified. Lazy thinking makes people think that equal opportunity SHOULD lead to equal representation. Nobody wants to hear WHY opportunity didn't translate to representation, they just want to see it done.

Further, now that all companies are being tried in "the court of public opinion," it won't matter what the company is doing to promote that opportunity, if it's not translating to actual representation. Quotas will be the the only politically safe approach.

My $0.02.

Jun 19, 2020 - 10:38pm

used to work at a major brokerage , and out of probably 65 brokers in my office there was only one black person. I was around for the conversations before that person got hired and that person was openly referred to as the "diversity hire" as if it was some charitable act for them to hire a black person. white blonde chicks were the main "diversity hires" though. the only other black people were in property management. this was mainly because all of the brokerage jobs were filled by "someone's nephew, friends son, etc...." all white. there's a serious problem for sure.

Jun 19, 2020 - 11:27pm

I ran a big real estate school club and my college was one of the most diverse in the US.

I think I can safely say that 80% of the people that expressed interest in the industry were white/middle eastern/indian guys.

Jun 19, 2020 - 11:40pm

That could be a function of cultural awareness/knowledge. I'm gay and middle eastern (Muslim).

Growing up in my household and extended family, it was very much "Doctor/Lawyer/Engineer" being touted as the successful and respected professions, and likely how the parents measure their own success as immigrants.

Wall St was not something there was a lot of understanding of in my extended family or community, let alone have much representation in. The lack of awareness and access makes it culturally difficult for parents to promote, suggest, or entertain those career opportunities.

To further look into REPE, Development, brokerage, Debt, etc., were absolutely not on anyone's radar, and I still doubt my family understands what I do. For a culture that likes to brag about success, it's hard to do that when no one understands the respective prestige/value.

I think it might be different if you're Persian-Jewish, but even then, it would likely be someone who has been in the US for a generation or two, or because people in the broader community that they know have built a dynasty because of it.

  • Associate 3 in RE - Comm
Jun 20, 2020 - 11:16am

I've been thinking a lot about this recently. I'm in the NY Metro area, and I'm an upper-middle-class white guy who grew up middle class. However, I am not Jewish. And anyone who works in NYC real estate knows that there's a serious hurdle if you're not Jewish. 95% of NYC real-estate billionaires are Jewish, and almost all the families are Jewish. Your only hope is to go the institutional route, otherwise, in my experience, you will be treated differently. This isn't spoken of because it's taboo to even consider the possibility that Jewish families would discriminate. I can only imagine how bad it is if you're black. You've got almost no chance outside of institutions with diversity programs, regardless of how qualified you are.

Now, why does this happen? I think it's more about real estate as a business. The only formal barrier to entry is relationships (no, capital is not a barrier to entry because it's very easy to raise capital if the returns are good). Therefore you get lots of nepotism because incumbents know it's an easy job and outside of analyst roles it's mostly sales, no matter what else your role is. (Most principals I've run across have no idea what the math behind the IRR calculation is, or why it matters.) You're hired based on likability and fit more than anything. And as already mentioned in this thread, they are totally bullshit qualifiers.

So we have a business with little in the way of barriers to entry and your incumbents (entrenched families) have tons of properties that they don't need to sell. The new entrants compete and earn the cost of capital and returns are eventually driven down. They raise private money from their respective communities and keep the cycle going. They then hire the family friend's kid because they invested their money with you, or their friend did. And it doesn't really matter to you because as long as they're hard working you won't get much of a benefit from hiring elsewhere.

So if this is how a white guy feels, what can a black guy/gal do to succeed? Be a hyper-realist. How does the world work? And how can I get what I want? Since we are now in a place where radical change seems afoot, you should be actively reaching out to firms right now--you're already top of mind. Capitalize on it. Reach out to what few black leaders there are in the industry. I don't care how much money they have, they're highly likely to respond to a thoughtful email from a kid who's wants advice on how to do what they did in such a biased world. They might not hire you, but they'll remember you or, even better, put you in touch with others. ASK. Finally, pick your geography carefully. Your probability of getting hired in NYC is likely much lower than in other markets. It's almost 0 outside of institutional shops. Yes that sucks. But what can you do about it aside from convert?

Jun 21, 2020 - 8:06pm
Associate 3 in RE - Comm:

I've been thinking a lot about this recently. I'm in the NY Metro area, and I'm an upper-middle-class white guy who grew up middle class. However, I am not Jewish. And anyone who works in NYC real estate knows that there's a serious hurdle if you're not Jewish. 95% of NYC real-estate billionaires are Jewish, and almost all the families are Jewish. Your only hope is to go the institutional route, otherwise, in my experience, you will be treated differently. This isn't spoken of because it's taboo to even consider the possibility that Jewish families would discriminate. I can only imagine how bad it is if you're black. You've got almost no chance outside of institutions with diversity programs, regardless of how qualified you are.

You nailed it! I spent a few years working for a shop that had over $3B of AUM, and the founder always used to refer to me as "the goy that does numbers". Moreover, as you stated, these old school family offices only care about COC returns, as an IRR or even an EM is a foreign concept to them. You are only allowed to model - God forbid if you try to provide any input on why a shitty retail deal will be a terrible acquisition opportunity. When things go south, you will get scapegoated. Which brings me to one of my favorite stories - this firm decided to stop its ARGUS Enterprise license because they were too cheap. However, the principals used to hilariously call me incompetent when I told them that you can't open up a functioning ARGUS run with Excel. Good fucking times...

I found the hard way - it really is institutional or bust in this industry....

  • Developer in RE - Comm
Jun 29, 2021 - 12:25pm

Damn. I needed to read. I'm actively leaving development for this reason and switching lending with top 5 bank. I'm glad I figured this out before it's too late. It's really hard to overcome the caste system in America.   

Jun 21, 2020 - 1:45am

I don't know if it's been mentioned already but you all should look into ProjectDestined. It's run by Cedric Bobo, a former Carlyle Principal, and A-Rod. I'm not in CRE but based on what I've heard from friends who've participated it definitely seems like they're building a pipeline of diverse talent into the largest CRE firms.

Jun 21, 2020 - 2:06pm

I've never heard of ProjectDestined before, so thanks for mentioning it. I'll definitely take a look into it more. I would be curious as to what their track record is and how other firms have worked with them, though at a quick glance they seem pretty new.

I am familiar with SEO since I know a lot of major firms work with them. I'm trying to get my current employer to partner with them so we can interview and hire for summer analyst/full-time positions.

I also used to do LGBT recruiting through O4U so i'm hoping to have that considered as a potential partnership, too.

Has anyone else had any luck in getting senior leadership sponsorship for diversity recruitment initiatives?

Jun 24, 2020 - 9:48am

As background, I have been working in the industry for 10+ years from a lower class immigrant Asian background. Diversity is terrible in the upper ranks (old, white) and is progressively better at lower ranks (but only for token Asian minorities and white women from upper middle class backgrounds).

There is still a HUGE gap in diversity when it comes to black, hispanic, and LGBT; representation across real estate and finance is an absolute JOKE for these groups. Furthermore, a more subtle discrimination occurs against people from lower socioeconomic backgrounds (poor families).

I think the issue here is the OVEREMPHASIS on cultural fit. It's just a back hand way to discriminate against people of different groups, backgrounds, and interest. There is an old interview question that is treated as the gold standard in our industry, and that is the "airport test". Who would you want to spend hours in the airport with if your flight gets delayed? Well guess what, you'll want to spend your time with someone who is similar to you, shares the same type of background, same upbringing, same interest, same hobbies. In this regard, ECONOMIC background puts poor people at a disadvantage. The common thread in the industry are upper middle class hobbies and interest. Wine, Golf, European Vacations, Parent's Vacation Homes, Study Abroad, Private School. It's much easier for people from upper middle class backgrounds to make these connections than poor people. I went to a top public university that all major IB/Consulting firms recruit at, and the determining factor was never really race OR gender, but economic background. The rich kids just had a lot more to talk about and felt more comfortable in the corporate world schmoozing environment because that is the environment they were raised in.

And this goes back to race, you're more likely to come from a poor background if you are black, hispanic, or LGBT. It's a socioeconomic issue at the heart of it.

We need to do better and not always fall back on "fit" when determining who to hire.

Jun 24, 2020 - 7:33pm
Analyst 2 in IB - Ind:

More likely to have poor parents if you're gay? wtf haha

Yeah, I was following along until the "you're more likely to come from a poor background if you are LGBT."

Having worked in NYC, and knowing tons of gay guys in finance there, I have personally come across a bevy of gays that come from wealthy (predominately white) families.

Jun 24, 2020 - 12:59pm

i gotta say i am impressed to find a discussion here on diversity that is actually insightful and productive. These threads usually get bombarded by people who think diversity is over emphasized.

This is refreshing.

  • 1
Jun 24, 2020 - 1:18pm

Welcome to the Real Estate forum, man. We try to be thoughtful here one way or another, except when it comes to ranking things. We are vehemently opposed to rankings. Extremists, if you will.

Commercial Real Estate Developer

  • 1
Jun 24, 2020 - 3:22pm

I think all four MS's I got for posting this came from the IB forum....... Diversity in CRE

Array

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  • Analyst 3+ in RE - Comm
Jun 24, 2020 - 10:54pm

"You wanna know what's more important than throwin' away money at a strip club? Credit.

You ever wonder why Jewish people own all the property in America? This how they did it. " -JAY Z

Jun 30, 2020 - 4:13am

i am an Asian female working in Australia CRE. after reading all comments above i just want to say CRE industry in OZ is just as bad as US.. (i guess all english speaking countries are the same)... especially in Investment, PERE or even AM , its rare to see women... (women are more in research or PM i reckon ) Usually i will be the only female in the team or even whole company( such a boys club!) and I wasnt born in Australia .. so as an immigrant female , i am proud of what i achieved so far.. ppl usually dont take me seriously but i guess i can only prove to them by my hard work... and i think ultimately i think i will go back to Asia for better career...

  • Associate 1 in PE - Other
Jun 30, 2020 - 12:51pm

Appreciate this discussion thread, a lot of this resonates with me, as an Asian-American male. I'm currently working at a REPE firm with prior stints in development and capital markets/banking and along the way, I've basically always been the sole Asian guy in my group/division.

I'll admit that as a first-generation Asian-American it's always been kind of weird. Growing up, I never quite fit in with the Asian community that my parents associated with due to my lack of (or refusal to learn) Mandarin language skills. As I began my career, I always felt some pressure to reject my "Asian" side in order to fit in and make it clear I belonged - from watching the way I spoke to make sure I didn't sound "foreign", being detailed but never too in the weeds for fear of being typecast as just another Asian "math genius" with a "low personality score" who isn't appropriate to put in front of clients, being extra friendly and outgoing, picking up golf, dressing well, being well-travelled, etc.

In a client meeting, the MD referred to something as "Oriental" once and then looked at me, which I'm sure was not intentional but just makes you wonder what people actually think of you in private. But at this point it seems like the majority of people in the industry are pretty accepting so it seems things are trending in the right way. Just my two cents.

Jul 8, 2020 - 10:10pm

I am still curious what ideas people have when it comes to diversity recruitment...

For firms that don't have large/formal summer internship programs or formal programs for hiring undergrads or graduate students, how do you reach out to diverse candidates as jobs open up at your firm?

How have your firms approached it in the past vs. how are they approaching it now? What has worked, what hasn't?

I know my team has one position that just opened up right now and we will likely have another open up later this quarter, so i'm curious if there are any suggestions worth implementing...

Jul 9, 2020 - 10:39am

The answer for the big firms is obviously just "interview more minorities." For the altruistic this is easy enough to implement and for those less open minded, tactics like removing names from resumes or simply recruiting at places like HBCUs will help.

The reality is though, most people in the industry, and most people on this website, don't work for Hines, Tishman, Greystar, etc. Much of real estate, especially on the development side, exists in 10-man shops that may hire once every 3 years.

I am able to hire, yet I struggle to get an intern in who isn't the son of a friend of the owner. Nepotism is the rule, not the exception.

I sent out literally hundreds of resumes when I was job hunting coming out of grad school. I can't possibly tell you how many people I had phone calls with, met with, grabbed coffee with, etc. Still, I ended up with 3 offers.

When women or racial minorities have their potential pool cut dramatically by nepotism, then further by good ole boy discrimination, they're automatically less likely to get a big time starting job. Meanwhile, the doofuses in my office during the summer will emerge with a strong resume and letters of recommendation from icons in my market.

Commercial Real Estate Developer

  • 9
Jul 9, 2020 - 12:35pm

While I agree the goal is to interview a more diverse candidate pool, I was asking more of what specific avenues/actions have people taken to cast the wider net so that more diverse candidates can be part of the interview process.

Are there specific job boards people are posting on that cater to a diverse demographic?

How have people partnered with HBCUs to put the postings in front of those candidates? Who do you reach out to in those organizations and how does that process work?

I recently learned about TOIGO and how you can post jobs there, so i'm curious what other specific ways there are to make sure the opportunity is getting in front of a diverse audience.

What approach has been successful and what hasn't?

(This is assuming the usual approach of posting on LinkedIn/Select Leaders/Company Website will continue to provide for a less diverse candidate pool, and result in candidates who receive referrals through the good ole boy's network who already have strong representation in the industry)

Jul 12, 2020 - 7:17pm

Diversity programs are inherently discriminatory. Think about it! Just hire the best candidate based on skill regardless of race or gender. Here is a radical concept I just came up with, let's judge people based on the content of their character, rather than the color of their skin.

pdc
  • 5
Jul 13, 2020 - 10:47am
XBBAttorney:

Diversity programs are inherently discriminatory. Think about it! Just hire the best candidate based on skill regardless of race or gender. Here is a radical concept I just came up with, let's judge people based on the content of their character, rather than the color of their skin.

If the industry is inherently discriminatory then diversity programs are a (much needed) way to even the playing field.

Everyone knows half a dozen people who got a job in RE, or finance, or whatever because daddy was friends with the hiring manager. How many of those folks were people of color? Essentially zero. And that is the discrimination. It's not "lets hang a Confederate battle flag on the wall and have a 'dress like the Klan' day instead of casual Friday's" racism. It's the fact that people of color don't have the network and connections to get the kind of good-old-boy/nepotism opportunities, and therefore don't place into these industries nearly as often as they should on pure "intelligence" or skills.

Jul 14, 2020 - 2:18am

Been thinking about this a lot myself as a POC. I was just talking to a friend who also looks like me – we both made an interesting observation:

Most successful people from our community that we have come across are actually the LEAST helpful and will generally try to AVOID leveling with you and helping you out. If they do they tend to almost question your pedigree and capabilities more so than anyone else.

When I was in school interviewing had white friends and their parents (eg. Connecticut crowd / dads are fund managers) do more to get me interviews or make personal recommendations to c-suite decision makers who could actually hire me than my own people who "made it".

Its quite a strange phenomenon – I've gotten the sense that they just think another brotha trying to shake them down or something. Pretty disappointing.

Anyone else experienced this?

I had a flair for languages. But I soon discovered that what talks best is dollars, dinars, drachmas, rubles, rupees and pounds fucking sterling.
  • 5
Jul 14, 2020 - 7:29am

That's interesting. I'm not in a position to opine on that, but I've heard similar complains from some women in the industry - the idea that their biggest gatekeepers were older women. Do you have any theories on why that may be?

Commercial Real Estate Developer

Jul 14, 2020 - 9:16am
Merchant_of_Debt:

Been thinking about this a lot myself as a POC. I was just talking to a friend who also looks like me – we both made an interesting observation:

Most successful people from our community that we have come across are actually the LEAST helpful and will generally try to leveling with you and helping you out. If they do they tend to almost question your pedigree and capabilities more so than anyone else.

When I was in school interviewing had white friends and their parents (eg. Connecticut crowd / dads are fund managers) do more to get me interviews or make personal recommendations to c-suite decision makers who could actually hire me than my own people who "made it".

Its quite a strange phenomenon – I've gotten the sense that they just think another brotha trying to shake them down or something. Pretty disappointing.

Anyone else experienced this?

I say this with the utmost trepidation, because I'm a white guy and in no circumstance should be taken as an authority on being anything other than that (and not even that, honestly), but this kind of gatekeeping sounds pretty typical.

If you're a junior banker, you end up staying til 2am and turning a thousand meaningless drafts of a meaningless pitch book that no one will ever see because your senior bankers had to do that. You wait for the printer because that's what your MD did in the 80s, regardless that technology has changed enough to make that meaningless. The people above you feel like they earned their position, especially in a cutthroat industry, because of all the shit they had to put up with, and now they're going to make sure the people coming after them "cut their teeth" in the same fashion. Again, irrespective of whether any of this makes sense or is healthy or can be done more easily. I've seen or heard of that enough, across enough industries, to make me think it's just human nature.

So it wouldn't surprise me if people of color, or women, or anyone else who faces an uphill battle to advance might feel the same way. If they had to struggle, so do the people coming after them. Obviously not everyone gatekeeps like this... but lots do.

Jul 16, 2020 - 5:15pm

This has been great, thanks everyone for posting. Glad we've gotten some solid dialogue going on.

Array

  • 1
Jul 17, 2020 - 1:02pm

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Commercial Real Estate Developer

Oct 13, 2021 - 1:18pm

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