College English Dixson, executive director at Roosevelt University’s Marshall Bennett Institute of Real Estate said last year, “The commercial real estate industry in the US has long been challenged by a lack of diversity which impacts its ability to be equitable and inclusive. There have been many discussions and presentations about how the industry might improve the effort to improve diversity … with more intent, commitment, engagement, and transparency.”
According to the latest Global Real Estate Diversity, Equity and Inclusion (DEI) survey, 92% of commercial real estate firms have prioritized DEI in the workplace. CRE firms have also added DEI-specific roles within their companies. Europe leads the pack, with 43% of firms employing a DEI-dedicated professional. Asia-Pacific ranks second with 33% and 21% of North American CRE firms hiring professionals specifically for DEI roles.
While North America may have fewer dedicated DEI positions within their CRE companies, 67% have formed DEI committees responsible for exploring, reviewing, creating, implementing, and updating various DEI strategies and initiatives.
Value of DEI Programs and Policies
As leaders recognize the need to include DEI in their business strategies, CRE companies have incorporated multiple policies and programs to promote and sustain DEI. To help with these initiatives, companies can track a variety of metrics, including:
- Employee demographics
- Women and minority-owned businesses within the tenant portfolio
- Philanthropic and volunteer contributions to improving social equity
To promote and encourage a diverse workforce, CRE companies can also:
- Incorporate workforce training to address unconscious bias
- Champion DEI-informed hiring practices
- Implement floating holidays enabling employees to observe other holidays not observed company-wide
Policies supporting a diverse workforce include peer mentoring programs, PTO/FPTO for caregivers and parents, and specific physical spaces designed with the intent to foster accessibility, choice, and wellness.
Other CRE companies have partnered with colleges and local organizations to develop internships to attract and retain more diverse — and often underrepresented — talent. Externally, companies have also implemented diversity supplier questionnaires to identify diverse vendors, holding themselves accountable for acting and living up to their commitment to DEI.
Leadership-driven initiatives that encourage greater DEI within the CRE industry have helped to increase opportunities for women, people of color, and other underrepresented groups. Many successful programs have provided training to address and support gender, racial, and sexual orientation equality.
Programs Supporting DEI
The commercial real estate industry includes a wide range of verticals: brokers, financial institutions, landlords, building supervisors, legal firms, interior designers, architects, general contractors, office suppliers, technology companies, HVAC and other utility providers, and so much more. Every industry segment is responsible for supporting diversity, equity and inclusion across organizations, vendors, and other stakeholders.
How might DEI look between CRE and its partners? A brokerage within the multifamily industry might implement a DEI training and inclusion program dedicated to providing its staff with insight into the demographics of those seeking an apartment in a specific area, for example. One company did just that, collaborating with the National Apartment Association (NAA) to create a program that facilitated conversations about DEI topics and enabled a greater understanding to grow between colleagues.
Another program — the Diversity Partners Program — was launched to support DEI efforts within the CRE industry. Its founding members include Ferguson Partners, NAIOP, the National Multifamily Housing Council, the Real Estate Roundtable, and Ventas. For multiple years, partners contribute up to $25,000 annually to support DEI initiatives. This financial support backs:
- The Real Estate Exchange (REEX), designed to introduce minority high school students to the CRE industry
- The mentorship program, supporting people of color anywhere along their CRE journey
- The Board Readiness Initiative, preparing people of color who are CRE executives and want to serve on public companies’ boards
The program’s inception stemmed from the recognition that while many companies involved in the CRE sector have worked to increase DEI, their efforts often remain siloed, not collaborative. Yet this industry’s foundation is built on partnerships, making it natural to incorporate those partnerships as a critical component of DEI efforts.
Through the partners’ commitment to improving DEI within their own companies and organizations, DEI will improve industry-wide via:
- Promoting the hiring, retention, and career progression of diverse talent organization-wide
- Vetting, hiring, and supporting diverse suppliers and vendors
- Increasing and improving the access of diverse entrepreneurs, developers, investors, and communities to capital and credit
- Championing and promoting accountability — and transparency — around DEI
Collaborating to Create a Culture of DEI
A company’s greatest asset is its people. The more varied experiences and perspectives within a workforce, the stronger the company and the greater its ability to deliver the highest quality service and products to its customers.
Collaboration is a critical component of DEI. The Global Real Estate DEI survey was sponsored by multiple organizations: ANREV, INREV, NAREIM, NCREIF, PREA, REALPAC, and ULI. It represented 435,000 employees, $2.4 trillion AUM, and over 160 firms across multiple commercial real estate sectors.
Increasing diversity in CRE requires partnership. It requires a strategic, intentional approach — and the industry needs to revise how it views diversity. Whether companies develop and implement new internship programs or implement DEI resource libraries, champion and launch employee resource groups or education fairs, the industry will benefit most from collaboration.
Commercial real estate businesses can improve diversity by approaching it with intention and incorporating it into their business decisions. Companies should develop and execute diversity plans with clear goals for how they will cultivate and support diversity throughout their workforce. Their operating budgets must include a line item for spending and investing in maintaining diversity within the company and community.
Definitions of diversity have grown beyond gender and race to encompass disability, gender identity, neurodiversity, sexual orientation, socioeconomic and educational background, and other traits challenging to define.
The Global Real Estate DEI survey and many other recent studies have shown that diversity enhances and improves performance. For example, diverse teams make better business decisions over 85% of the time. According to Rock Creek Group, gender-balanced teams produce 20% higher net IRRs. DEI will continue playing an essential role in helping firms generate higher returns for their investors.
Are you a commercial real estate investor or looking for a specific property to meet your company’s needs? We invite you to talk to the professionals at CREA United: an organization of CRE professionals from 92 firms representing all disciplines within the CRE industry, from brokers to subcontractors, financial services to security systems, interior designers to architects, movers to IT, and more.