Commercial real estate is an industry that is often viewed as lacking in diversity. Progress both before and after 2020 can best be described as incremental, but steps are being taken to move the needle forward.
Setting targets for change
In Canada, the Commercial Real Estate Equity and Diversity Council was recently formed to help diverse communities remove systemic barriers. Along with developing a mentoring program, the council will be encouraging companies to develop and implement diversity principles and to set targets for instituting change. The organization plans to be a resource for companies wanting to get started with a diversity program.
In 2020, the Ontario Real Estate Council created a Presidential Advisory Group to help create an action plan to eliminate racism and promote inclusion. A key focus is on encouraging more diversity and inclusion in leadership at brokerage and board association levels.
The Women’s Leadership Initiative (WLI) Toronto chapter is committed to increasing the number of women in leadership roles in the real estate industry. WLI was established in 2011 as a global program and has 40+ chapters in eight countries. This organization has an important role to play in furthering women in leadership positions.
Latest diversity numbers
The real estate industry compares favourably to other TSX-listed firms with regard to women director diversity levels. Data compiled for Osler’s 2021 Diversity Disclosure Practices [PDF] report shows that 25% of directors at real estate companies in 2021 were women (up from 22% in 2020), compared to 22% for TSX-listed companies as a whole. On a per-board basis, the number of women directors was 1.91 for the industry compared to 1.83 for TSX-listed companies overall.
Breakdown of number and percentages of women directors in 2021
Breakdown of number and percentages of women executive officers in 2021
Trends since 2015
In the United States, a 2017 study by Bella Research Group and the Knight Foundation showed that 75% of senior executive jobs in the U.S. commercial real estate industry were held by white men, while only 1.3% were held by Black men. White women held 14.1%, while less than 1% of non-white women were in senior executive-level jobs. A 2020 survey by the National Association of Real Estate Investment Managers found that women represented 15% of executive management positions in the industry, up from 12% in 2017. Meanwhile, minority professionals within real estate investment management represented 15% of executive management positions in 2020, compared to 10% in 2017.
Women executive officers in the real estate sector
For both women and visible minorities, progress has been impeded by barriers to entry. In an industry largely driven by relationships, those in the business tend to work within their circle. They also recruit within the same circle. Those on the outside are unaware of networking opportunities. Apart from the lack of a network, which hinders informal recruitment, women and visible minorities often face a shortage of mentorships and sponsorships within the corporate setting. These are the individuals who support, encourage and help navigate the unspoken rules of the industry, which are so crucial for making contacts. The Toronto chapter of the CREW Network is helping to address this by offering mentorship programs, pairing women with less than five years in the industry with more senior executives.
At the corporate level, barriers to diversity and inclusion include not knowing how to start a program. Some companies simply do not make diversity a priority and do not allocate resources towards development of initiatives. They do not recognize that diversity and inclusion requires a mindset change across shareholders, management and employees. Leadership is also needed to set the tone and to be available for support.
Best practices and sector leaders
Osler’s 2021 Diversity Disclosure Practices [PDF] report identifies DREAM Unlimited Corp. as having at least 50% of women in director positions. Melcor Real Estate Investment Trust had exactly 50% women executive officer representation.
In the U.S., the Real Estate Executive Council, which is a trade association for commercial real estate professionals of colour, has launched a new Diversity Partners Program. This program partners with development companies, real estate groups and other trade associations to set clear and measurable goals for supporting vendor and supplier firms owned by people of colour. A primary goal is to change the industry from within and to groom younger generations to consider real estate as a viable option.
BentallGreenOak has set a policy that two-thirds of future hires be women and minorities. Their goal is to build an employee base that is reflective of society and their customer base.
Earlier this year, two industry leaders made appointments which show the importance they are placing on diversity and inclusion globally. JLL, a global real estate services firm specializing in commercial property and investment management, appointed a head of diversity and inclusion in a newly-created position. The mandate of this role is to guide the company’s network of business resource groups and diversity councils, while leading a team of diversity and inclusion professionals across the globe. Blackstone, a global leader in real estate investing, appointed a head of diversity, equity and inclusion, with the mandate to achieve a more diverse and inclusive workplace both at Blackstone and its portfolio companies. Taking a global perspective on diversity and inclusion is something we can expect to see more of from industry leaders in the near future.
For real estate companies and their leaders, the benefits of diversity and inclusion can no longer be denied. It is just a matter now of ensuring that supporting programs and initiatives are firmly embedded in the industry’s culture.