Women Continue To Conquer Commercial Real Estate

In the summer of 2020, a wave of civil rights protests took off in response to the death of George Floyd at the hands of police. Protesters were marching not only against police brutality, they were also demanding a more equal and inclusive world—and commercial real estate leaders heeded the call. Companies have since committed to diversity, launching internal DEI platforms and setting benchmarks to achieve goals, not just talk about them.

For women, the topic of diversity in the commercial real estate industry has been a decades-long conversation, and in that time a lot has changed. Women now have a seat at the table, but female leaders agree that there is still work to be done to achieve true gender diversity. We talked to some of those leaders to find out how far the industry has come, the issues that still need to be addressed and how industry leaders are responding.

BIG STEPS FORWARD

Women have long been making strides toward equality in the industry, and in many ways, women are reaping the rewards today for those early efforts. The biggest step forward has been the presence of women in leadership positions, and those women are helping to pull up the next generation. “Throughout the course of my career I’ve seen women take a more prominent role in CRE as vice presidents, presidents, COOs and CFOs,” says Kim Masayko, SVP of operations at Brixton Capital. “I was fortunate enough to witness this firsthand during my time at Regency Centers when Mary Lou Fiala took the role of president and then eventually, Lisa Palmer took a seat as Regency’s CFO and president. For a young woman starting off in commercial real estate, it was an inspirational time.”

Camille Renshaw, CEO and co-founder of brokerage firm B+E, has also been lucky to see many women in leadership positions, and is especially encouraged by the presence of women in boardrooms at publicly traded companies; however, she admits that there is still a grave imbalance. “The trend must go further,” she says. “One woman on a board of seven directors reflects a weak culture. Fortunately the market is forcing these companies to make further changes, and my hope is this will ultimately trickle down to the employees.”

However, there were moments from the last year that were big wins for women in leadership positions. “I am inspired when I see Mary Fedewa advance to CEO of STORE Capital, Collete English Dixon join the board of Marcus & Millichap, Katie Keenan become CEO of Blackstone Mortgage Trust, and longtime retail developer Karen Hutton set new financial benchmarks for the car wash industry as she grows her startup, ModWash,” says Renshaw. “They have all advanced through hard work, raw talent, and strong relationship skills—vital keys to the CRE industry.”

The presence of memberships to women-driven organizations, like CREW, also illustrates the increasing presence of women throughout the industry. “Women clearly have a seat at the table now,” says Masayko. “Over the past decade you’ve seen membership growth in groups like CREW really take off, which tells me women are out there and playing more prominent roles in the industry. I’ve found more women participating in roundtable discussions and being panelists at industry events.”

Gender diversity is about more than just the presence of women in the industry or in leadership roles. Diversity also requires an industry and corporate culture of acceptance and collaboration, and that is also beginning to manifest. It is a trend that Rochelle Mills, president and CEO of Innovative Housing Opportunities, has experienced as one of the biggest changes in the last decade. “I am excited by the collaboration and partnerships being formed that leverage talent and expertise to increase the impact of the work we do,” Mills explains. “I am also excited that we are seeing more mentoring and partnering by the larger developers and consultants with minority and small businesses. The result is that CRE is more responsive and accountable to building the kind of communities where we want to live.”

Michelle Weber, regional VP at RiverRock Real Estate Group, agrees that culture plays a large role in achieving gender diversity in the industry. “As long as we create a cultural landscape that supports an open dialogue and allows for these things, I think we’re on the right track,” she says.

MORE WORK TO DO

While women have proven to be a force within the industry, there is more work to be done in the push toward equality. The CREW 2020 Diversity and Inclusion Benchmark Survey, which Renshaw notes, has highlighted some major pillars where the industry has fallen short. Women represent about 36% of commercial real estate professionals, unchanged over the last 15 years, and women hold only 9% of C-suite positions. Women also earn much less than men, with a fixed salary gap of 10% and a commissions and bonuses gap of nearly 56%. “Those stats are awful,” says Renshaw.

While there are more women in the industry, women are typically concentrated in accounting and property management roles, according to Masayko, and Renshaw notes a lack of women in investment sales positions. While the CREW survey found a record proportion of women in brokerage positions, women still only account for 29% of brokers.

The pay gap is among the biggest challenges that remains for women in the industry—and it is getting worse. When comparing total earnings, the CREW survey finds there is a 34% pay gap between men and women, an 11% increase from the previous survey in 2015. For women of color, the gap is even wider, with Black women earning only $0.85 on the dollar as compared to men; Asian women earning $0.86 on the dollar; and Latina women earning the lowest at $0.80 on the dollar. “I think equality in compensation remains an outstanding issue,” says Masayko. Renshaw adds that women make up a disproportionate number of professionals in the retail and hospitality sectors. “Those segments were disproportionately hit [during the pandemic], compressing revenues and corresponding brokerage commissions and job growth in these areas,” she says.

While hiring practices, leadership positions and compensation are the mainstays in the fight toward a more diverse industry, women are also requesting a better work-life balance, particularly following the pandemic, which disrupted standard routines, like child care and in-class education. “We are experiencing a huge shift in employer and employee mentalities with respect to work-life balance,” says Masayko. “Work-life balance is in no way a new concept, but we are witnessing the true seeds of change brought on by the new pandemic world we live in. I think this change is especially significant for the working women who also have primary household responsibilities. This may be the opportunity for more women to contribute to the workforce than ever before.”

In other ways, the pandemic has exacerbated work-life imbalances and made it more challenging for women to attend to both domestic responsibilities and professional duties. “The pandemic changed virtually every conversation we have in our professional and personal lives,” says Masayko. “Women are, in most cases, the custodian of the home and I’ve seen how women have had to adapt to the changing environment by managing their home and family and the new demands that working from home can bring. This has not been an easy time for many and I’ve seen so many women at Brixton Capital elevate to the occasion.”

Mills, on the other hand, believes that mentorship is the “last frontier” in the conversation about gender equality. She asks, “How effectively are we reaching back and sharing our skills, connections and resources with other women and men? Are we a resource to women moving into this field from college or changing careers? Are we giving as often as we are asking?”

Women that have already moved up the ladder are frequently not serving in these roles. “Too often I hear women say they are too busy to serve on boards or hiring committees, mentor others, or provide a reference,” says Mills. “We are all busy. We got to where we are by our skill and tenacity. The question is ‘are we part of the solution or part of the problem?’ Don’t step down; step up.”

COMPANIES GO ALL IN

In the last two years, commercial real estate companies have publicly committed to improving diversity and inclusion in the industry. While 59% of professionals in the CREW survey said there was little-to-no diversity at their firm, more than half had noticed a culture shift regarding diversity, equity and inclusion. Launching a dedicated DEI platform is certainly a great starting point, but many leaders have noted that it could fall short of achieving real change without a commitment to action. To avoid that pitfall, setting benchmarking goals is crucial to creating real change. “Many philosophical commitments have been made by large corporations and much lip service has been given to DEI, but few have instituted KPIs that will quantify the success or failure of their DEI philosophies year over year,” says Renshaw, whose firm tracks progress in diversity and hiring practices. “Any other financial initiative would have concrete KPIs set up and enforced.”

Although RiverRock has had diverse hiring practices for several years, the firm cemented its commitment to DEI last year. Key performance metrics have been central to the strategy. The program includes “developing standards, metrics for measurement and partnerships with outside agencies to support our DEI effort. Goals and objectives focusing on internal efforts are currently in development by the team and will remain one of our key objectives for the foreseeable future,” according to Weber.

Mills is also looking ahead to the future of these platforms, wondering if these programs will support sustained diversity. “Unfortunately, too often, I see diversity and equality represented in well-orchestrated marketing pieces,” she says. “I love the idea of hiring key positions in DEI. But society tends to have short attention spans. When DEI is no longer the issue of the day, what happens to those people and that commitment?”

One way is to start at the bottom. Companies are taking a strategic approach to long-term diversity by hiring a diverse team of young professionals, which will ultimately create real change in the industry. The CREW survey had a 5.4% increase in respondents under the age 39, showing that there is a growing population of young professionals entering this market. Renshaw is also investing in young professionals at B+E. “We create change by investing in diverse candidates earlier in their careers,” she says. “At B+E we believe that a diverse analyst team will ultimately create a diverse investment sales company.  So we have a strong commitment to hiring at least 50% women on the analyst team, as this provides a direct path to becoming a broker. We are leveraging our analyst program to create diverse leaders of the future—and we are eagerly promoting women from within B+E.”

Renshaw doesn’t stop at the analyst team, the firm has set benchmarks to maintain diversity at every level. This has led to four female members of the nine-person board; women making up 50% of department leads; and women in leadership roles, like Heads of People.

Mills suspects that the nonprofit sector has better diversity than the for-profit sector. At Innovative Housing Opportunities, three-quarters of the leadership, board and staff are women or minorities. “This is less likely in the profit-motivated sector or in offices where the lead is white and male. Those offices tend to be more monolithic in composition and attitude,” says Mills, who adds that it is natural for the firm to have a diverse staff because it serves diverse communities. “We have made that part of our hiring practices from our staff to our consultants to our board and advisors,” she adds. “It is powerful knowing that, as developers, we hold the purse strings and can make that demand. Our north star is excellence. We expect that from everyone we work with, whether they are a start-up or a large corporation. We are building a legacy, so these are not just words. They are our culture.”

Once implemented, DEI programs have the potential to scale rapidly. Innovative Housing Opportunities sees diverse applicants because its workforce is diverse. “I wonder if it is that people who look like us feel more comfortable asking to work with us,” she says. Weber of RiverRock has also seen that DEI programs can quickly change an organization. “This can have a ripple effect on our industry. It can start at the local level and reach nationwide,” she says.

Ultimately, diversity is good for business. Studies regularly show that companies with diverse leadership teams have increased revenue and better longevity. Weber says that gender diversity is necessary for progress, and Mills, who wants IHO to be a leader in this field, says that diversity is good for business and for the future of the industry. “I recognize that investing in our team means that as they grow, they will be recruited, and others will move on,” says Milles. “In the end, we will have helped develop an arsenal of brilliant CRE professionals who are making the world a better place, and they will invest in others, and so on, and so on.”

But, that is sort of the point. Increasing diversity within individual companies will lead to a more diverse industry. As Renshaw says, “We become what we behold,” and as women penetrate all facets of industry, diversity will follow. It starts with the individual. “The more women we have in positions of influence,” says Renshaw, “the more quickly archaic systems will change, and true diversity and inclusion will become the norm within commercial real estate.”