In the news: CRE Firms Place More Women, Minorities in Top Roles
Commercial Property Executive
February 3, 2021
By Barbra Murray
The representation of women and minority professionals at the executive management level in commercial real estate went on a notable upswing over the past four years, according to the latest NAREIM Diversity & Inclusion survey, which also indicates that not much has changed for the industry’s gender and ethnicity diversification since 2016.
Moreover, the number of firms in the industry that are committing staff to diversity, equity and inclusion efforts has skyrocketed.
As noted in the survey, which NAREIM conducted in partnership with executive recruitment firm Ferguson Partners, minority professionals (male and female) accounted for 15 percent of executive management positions, marking a 50 percent jump from 2016’s figure of just 10 percent. The representation of women in executive management roles increased from 12 percent in 2016 to 15 percent in 2020. Additionally, among senior-level professionals, women now comprise 30 percent of executives, compared to 23 percent four years ago.
“What the 2021 NAREIM Diversity & Inclusion Survey showed was that 44 percent of new executive management hires in 2019 were women. This figure is well above the current percentage of women in executive management, and significantly outpaced departures among female executives in that year. That helped contribute to an overall increase in the percentage of executive roles held by women across the industry and was a meaningful factor in driving demographic shifts,” Zoe Hughes, CEO of NAREIM, told Commercial Property Executive.
The Road Ahead
NAREIM also queried survey participants about their diversity, equity and inclusion approach, and 71 percent responded that they committed staff to their DEI efforts, either with dedicated employees or through committee structures with employees from across business lines. In 2017, only 37 percent of survey participants were taking this approach.
“NAREIM has conducted a survey of corporate diversity, equity and inclusion best practices and metrics since 2017 and if there was one clear message to take away from the 2021 Survey, it was about the mandate and prioritization of DEI within our industry,” Hughes said.
“Almost all managers—96 percent—involved in the survey have a DEI program or initiative to improve diversity, equity and inclusion within their firms, while the number of firms dedicating staff to DEI almost doubled between 2017 and 2021. We understand it will take time to change the headline demographics of our business, but the NAREIM Diversity & Inclusion Survey shows we are seeing traction on DEI.”
NAREIM also addressed a not-oft openly discussed issue of whether investment managers and institutional investors compromise performance by investing in a diverse real estate team.
Peter Braffman, managing director & head of real estate with GCM Grosvenor, shared his research and thoughts on the subject in an interview for the survey. He told NAREIM: “As an industry, we need to demystify the notion that if you’re investing in emerging or diverse managers, you’re limiting your subset and therefore you’re sacrificing performance. This blanket statement is out there. But it’s just not true.”