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Danielle Douglas is associate editor of Real Estate Forum magazine.

Traditionally, white males have dominated all segments of the commercial real estate industry. And while that is still primarily the case, many firms and associations are making strides in ensuring that the composition of the industry is becoming more reflective of the world at large.

Countless corporate initiatives have sprung up in recent years to recruit and retain women and minorities. From brokerage to finance, companies are increasingly recognizing the social and economic benefits of having a more diverse staff. Minority and women-owned businesses are also gaining a foothold in the industry, with some even partnering with major firms looking to access more diverse business segments.

Still, it can’t be denied that the industry could stand to be more inclusive. Progress, albeit forthcoming, is a slow evolution, say some observers. However, many agree that the groundwork for change is certainly being laid.

Responding to the Market

By 2020, the US Census Bureau projects that minorities will comprise some 40% of the total US population–a near 10% growth from 2000. With this forecasted increase, the US Department of Commerce anticipates minority purchasing power to almost double from $1.3 trillion in 2000 to $2.4 trillion in 2020. Statistics like these have, in part, served as a wake-up call to the commercial property business about the importance of attracting people of color as employees and clients.

“Sometimes we don’t want to admit that we have a comfort level with people that are familiar to us, whether it’s race or gender based. Obviously, our business is relationship based, so there are some advantages to having a more diverse staff,” says Ron Whitley, chief diversity officer for Cushman & Wakefield.

Since the fall of 2002, the Chicago-based executive, who was named to his newly created position last year, has helped drive a number of minority talent-acquisition initiatives at the global real estate solutions firm. To this end, he attends a host of ethnic networking events, most recently serving as the only representative from a real estate firm, he says, at the National Association of Asian American Professionals convention in Atlanta. “The fact of the matter is that the Asian-American population is the second-fastest growing population in the country, just behind the Hispanic population. There’s talent among that group that I absolutely feel can be successful at our firm,” says Whitley.

As a part of its diversity platform, C&W has been a corporate sponsor of the 10-year-old Real Estate Associates Program, a national initiative that provides internships for minority professionals looking to enter the industry. Four REAP graduates, according to Whitley, have so far been hired by the firm. On a collegiate level, the company has established relationships at historically black colleges—Florida A&M University in Tallahassee, FL as well as Spelman College and Morehouse College in Atlanta. Since 2004, the firm has brought on over 25 interns from Florida A&M alone. Eight of those participants were eventually offered full-time positions.

“Diversity of thought is very important because not everyone will approach an assignment or a deal in the same way,” he says. “Keeping in mind that we are a relationship-driven business, when we are more diverse I think we really have a creative edge in approaching a particular deal or client.”

Employees who understand certain cultural nuances, say experts, may indeed have an advantage. Such is the case of CB Richard Ellis’ relationship with Hispanic-owned La Curacao, asserts the company’s vice president of investment properties and retail leasing, Xavier Santana. He is part of the team, led by first vice president James E. Rodriguez, that has been assisting the big-box retailer in its expansion efforts in the West and Southwest since 2005.

Headquartered in Los Angeles and with eight locations throughout California, La Curacao offers more than the standard fare of retail products. It provides a number of services that are of special interest to the Latino community, including long-distance telephone, travel and export services.

“La Curacao was looking for brokers who were familiar with the Hispanic culture and buying habits,” says Santana, who is based in Stockton, CA. Many of the retailer’s customers, he says, purchase products to be sent back to family members in their native countries, which has influenced the company’s site-selection process. “The location of various distribution centers is very critical. Whereas Target, for instance, would look at a trade area of about five to 10 miles, La Curacao’s would be 50 to 100 miles,” he notes.According to Santana, the team had to create specified marketing data, such as maps illustrating the migration patterns of Hispanics, that weren’t previously offered by CBRE. In doing so, he and Rodriguez, whose retail client base is more than 75% Hispanic, recognized that there was a demand in the market that needed to be filled. With this realization came the creation of the CBRE Hispanic Network, spearheaded by Rodriguez, in 2006.

One of three specialty networks serving under-represented groups (the others are the African-American Network Group and Women’s Network), the association is dedicated to addressing the needs of the thriving Hispanic market. In addition, it is focused on increasing professional development and business opportunities for the company’s Hispanic employees, as well as community outreach.

“We find that there are a lot of successful Hispanic-run businesses that may have one or two locations, but struggle in launching additional sites and understanding the real estate industry,” says Santana, who is also chair of the network. “So part of our goal is to do some outreach into the community to let them know that CBRE is here and has people to service them.”

The fledgling group already has 33 members in 15 markets. Santana anticipates that the network, which grew largely through word of mouth, will soon top 100 members upon its official introduction to the entire company via e-mail blast.

Sharing the Success

The diversity initiatives of real estate companies like C&W or CBRE are part of a larger effort that involves the work of numerous independent organizations like the Commercial Real Estate Women Network. For over 20 years, the Lawrence, KS-based association, through its annual conventions and development programs, has worked toward having the industry recognize the value of recruiting, compensating and promoting qualified women. Progress in those areas is becoming more evident, says the organization’s president, Marianne Ajemian.

“The fact is, you have a significant number of women at all levels within real estate who are working together, doing deals and serving as mentors for younger women. They have been able to reach a decision-making level, allowing them to have an impact on the industry,” says Ajemian, who is also a partner in the real estate and finance department of law firm Nutter McClennen & Fish LLP in Boston. “All of that goes to the cumulative weight of the positive changes that we are seeing.”

Dorothy Alpert, national managing director of real estate, hospitality and construction for Deloitte & Touche LLP in New York City, also believes that women are making progress in the property business. “The industry is maturing, and a number of organizations have done a very good job in providing support for women,” says the 15-year real estate veteran. “Strong networks make it easier for anyone to navigate the challenges of organizational matrices.”

Still, challenges abound. A 2005 study conducted by CREW concluded that gender-based disparities were still very much a reality throughout the industry. For example, given similar positions and years of experience, men reported higher compensation levels than women. Furthermore, women were not as likely as men to hold top-level posts, suggesting that parity was still a distant goal.

Alpert notes that while she has witnessed a surge in the number of women in entry-level positions, there is still a dearth of females in more senior roles. She attributes this, in part, to the evolving structure of the industry. “I think that it has been only in the last 15 years or so that real estate has begun to professionalize, moving away from a model that is more entrepreneurial, closely held and loosely run,” says Alpert. “And by that, I mean not having as much focus on initiatives to retain high-talent women.”

As a follow up to CREW’s initial study, the organization released a report this year delving into some of the reasons for the gender gap. In the survey, “Minding the Gap,” a majority of respondents cited a lack of equal advancement opportunities for women to become C-suite executives or to hold other senior management positions as a primary culprit. Participants also said personal hesitation in negotiating salaries and taking jobs with risk inherent in performance-based pay structures played a role in holding women back.

“Women still face the challenge of knowing what the appropriate compensation levels are and understanding the risks that they should be willing to take to get ahead,” says Ajemian. “But they are recognizing the need to ask questions, seek out role models and think about the next steps in their careers and what they need to do to get there.”Moving beyond promoting professional development for its 7,000 members, in 2005, CREW embarked on a campaign to attract young women to the industry. Under the auspices of the philanthropic arm of the organization, CREW Foundation, CREW Careers is aimed at introducing teenage girls to careers in commercial real estate, using local property projects to illustrate the various opportunities available in development, brokerage, finance, architecture and engineering. Among some of its corporate sponsors are C&W and law firm Holland & Knight. “Our foundation wants to help create more opportunities for the economic self-sufficiency of young girls and women,” says Ajemian.

She explains that the association has also begun reaching out to universities and colleges on a national level to inform female students about potential careers in the industry. At its upcoming October convention in Denver, CREW will host its first university outreach session, inviting students from the surrounding area to participate.

In a survey conducted last year of 10 colleges and universities, most students said they never considered real estate as a career option. This was especially true in business schools. With women flocking to MBA programs in droves—a recent survey by the Graduate Management Admission Council found that about 57% of full-time MBA programs received more applications from women in 2007 than the previous year—now may be the best time to sing the praises of real estate.

The changing skill sets needed in many segments of the industry, particularly brokerage, has created a demand for more well-rounded employees with business degrees, says Ajemian. “The large brokerage firms are full-service consulting firms that provide financial analysis, marketing skills and asset management. They have a whole new skill package that they are looking for in an MBA candidate,” she says. “So the perspective of what kind of person should go into that segment of the industry has changed.

Accordingly, the people who are entering the business now represent a wider diversity than what was typically thought of as an ‘old-boy network.’ ”

Shaking up that old-boy network has been a task gladly undertaken by the Real Estate Executive Council, a professional trade association for minority men and women in the commercial real estate industry. Since its inception four years ago, Chicago-based REEC has made inroads through its contributions to REAP and in its launch of the Global Diversity Summit in Commercial Real Estate. Now in its second year, the summit, held this past July in Atlanta, offers workshops to educate minorities on the ins and outs of the business.

“People want to know how to build relationships, how to access capital and how to get the expertise they need to become significant players,” explains Victor B. MacFarlane, managing principal, chairman and CEO of MacFarlane Partners, who sits on REEC’s board of directors.

In an industry once dominated by family businesses, accessing circles of influence is often daunting for minorities and women, say observers. Many believe that this is one of the key reasons why the two groups are so vastly under-represented the sector. “It’s a clubby business,” says San Francisco-based MacFarlane. “From that perspective, it’s not just your color, but it’s also your relationships. So people of any hue can have a hard time breaking into commercial real estate.”

In an attempt to level the playing field, MacFarlane and the other 25 members of the consortium are committed to sharing their own experiences to serve as a resource. “One of the key premises of this council is that those of us who have had some level of success can be role models to others who are trying to understand our business or get into it,” says the executive, who heads one of the most successful minority-owned real estate investment outfits, with $15 billion in assets under management. “It’s important that we, as leaders in the industry, are available to talk to and answer questions about how we got where we are, and give advice on how other people could achieve the same level of success.”

The Background Benefit

Given the push for greater diversity, more minority-owned businesses are benefiting from their heritage. Take for instance the Native American-owned construction firm Flintco Cos. Inc. Though it is now perhaps the largest Native American-owned construction outfit in the world, with more than 800 employees and annual revenues exceeding half a billion dollars, Flintco was not always well received in the industry.

“My grandfather and father experienced significant discrimination as they built this business,” explains Robin Flint Ballenger, chairman of the 99-year-old firm. “But now the pendulum has swung back. With the advent of government programs and the rise of Indian and tribal businesses, it’s quite the opposite.”

Headquartered in Tulsa, OK, Flintco grew through its general contracting and construction services for a wide range of clients, but has long been involved in the creation of hundreds of projects for a variety of Native American entities. “My family’s heritage is absolutely an asset. It has given us Indian Preference, and opened doors for us with many tribes, pueblos and rancheries,” says Ballenger. Flintco has built a diverse portfolio of developments on reservations across the country, including schools, healthcare facilities, casinos, retail and community centers.

Beyond actively seeking out Native American and other minority employees, Flintco works closely with tribal entities to increase the participation of its members in the construction process and to achieve maximum federal support. To usher more Native Americans into the construction trade, the company has established several training programs, enabling workers to learn carpentry and other skills. With its American Indian Co-op program, Flintco has made sure that anywhere from 30% to 100% of the employees at most of its tribal projects is Native American.

Like Flintco, Concordis Real Estate Inc., a five-year-old union of nine independently owned and operated minority and woman-owned firms across the country, has been able to benefit from its unique position in the market. In 2003, Concordis launched a strategic alliance with Cushman & Wakefield that has proved prosperous for both companies. In June of this year, the team was selected to provide consulting and brokerage services to the New York City Health and Hospitals Corp. At the end of last year, the alliance was awarded an ongoing contract from the University of Houston to provide appraisal, consulting, acquisition and tenant representation services.

The partnership, notes Ron Whitley, has allowed C&W to tap into Concordis’ corporate capabilities to essentially broaden the firm’s client base. The consortium is comprised of cross-disciplined divisions that offer brokerage, development, consulting, design, project management and property management services. “They bring to the table the ability to capture some large corporate accounts where diversity initiatives are important. A lot of large firms, say, Prudential or American Express, for example, include as a part of their diversity initiatives a minority supply target,” he says.

Looming Possibilities

Given the changing demographics of the employee base in this country, it’s inevitable that the industry’s composition will look vastly different in the future. Observers say it’s merely good business sense for companies to be proactive in diversifying their staffs. Besides, with the successes of numerous minority and women-owned companies, it’s evident that the two groups are and will continue to be an important part of the business.”Despite the fact that there are challenges within commercial real estate in dealing with issues of diversity, there are also enormous successes,” says Ajemian. “There are examples of women and minorities who are accomplishing great things in real estate, and those accomplishments should be celebrated.”

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