In an increasingly diverse country, the commercial real estate industry faces a clear challenge.
“The commercial real estate (CRE) industry has historically seen below-average levels of gender and racial diversity, and it now faces a looming talent shortage as baby boomers age out of the workforce. In this context, diversifying the CRE workforce is not just a matter of social good but also one of necessity,” according to “Diversity, Equity and Inclusion in Commercial Real Estate,” a new study by the NAIOP Research Foundation.
A 2022 survey by the Urban Land Institute concluded that women make up 42.5 percent of full-time CRE employees in North America while people of color are 31.3 percent. In a separate CRE industry study by CREW Network, only 16 percent of respondents reported that at least 25 percent of professionals in their companies were BIPOC (Black, Indigenous and People of Color). The CREW study also identified pay gaps between white, male CRE workers and all others, including an average 33 percent compensation gap between men and women in C-suite positions.
Authors of the NAIOP study interviewed representatives of 11 different CRE firms and analyzed diversity, equity and inclusion (DEI) policies and programs around the U.S. to determine best practices for creating effective DEI efforts in the CRE industry.
“The most successful policies are substantive and not performative, have strong support from leadership and are interwoven at all levels of the company,” the study states
The study describes the DEI programs of several companies, including Prologis.
“Prologis has goals for its policies based on three pillars: they must be impactful, sustainable (in terms of longevity) and measurable. Embedded within these pillars are three areas of focus: people, procurement, and philanthropy,” the study states.
Prologis and other companies discussed in the study – including Trammell Crow Company, Brookfield Properties, CIRE Equity, Hines, Colliers and others – have recognized that “recruiting diverse candidates is a cornerstone of DEI strategy.” But that can only be accomplished by changing some standard CRE operations.
“The relationship-based nature of the CRE industry poses unique challenges for increasing diversity,” the study says. “Since a lack of diversity in the industry is self-perpetuating, firms must make a concerted effort to realize meaningful change in this area.”
Those changes can involve engaging with local colleges and universities and expanding summer associate programs to increase the diversity of applicant pools.
“Trammell Crow has found success working with diverse study groups on college campuses – including affinity groups for African Americans, women and Latinos – to connect students from diverse backgrounds with careers in CRE,” according to the study.
Some companies have taken steps to ensure their recruiters and interviewers are diverse. Some have started using software tools to “remove bias from candidate recruitment and selection.” For example, Colliers uses software that reviews job descriptions and postings to make descriptions as fair and unbiased as possible. Other software can hide the names of candidates and their colleges to help mitigate unconscious bias from the screening process.
To make workplaces more inclusive and equitable, many companies have expanded mentorship programs. Some “go beyond traditional conceptions of mentorship to promote sponsorship,” the study says. “For example, Prologis takes a research-backed approach to sponsorship that requires sponsors to amplify, boost, connect and support their mentees.”
Growing numbers of companies are supporting Employee Resource Groups (ERGs) – voluntary groups that bring together people with a common background or interest to create “psychologically safe environments where those voices are amplified.”
Many companies have also expanded their definition of diversity to recognize, attract and support a broader range of employees, including those of different race, ethnicity, gender, sexual orientation, physical and mental abilities, parental status, national origin, religion, generation and military service.
Increasingly, CRE companies are also changing and expanding their external collaborations to improve DEI. Some firms are changing their procurement practices and tapping resources, such as the Commercial Real Estate Diverse Supplier (CREDS) Consortium, to do business with more women-, minority- and veteran-owned businesses. Some CRE companies are also becoming more active participants in the communities where they do business by supporting and partnering with schools, colleges, nonprofits and community-based programs that serve historically underserved populations.