November 16, 2022 by Miriam Hall

'The Hardest Job In Business': CRE's Chief Diversity Officers On Their Roles 2 Years Post-George Floyd

This is the third annual installment of Bisnow's DEI Data Series, an ongoing investigative project that examines the diversity of the boards and executive leadership of the biggest companies in commercial real estate. Over the years, this award-winning series has amassed a cache of data that continues to shine a spotlight on racial and gender inequality at the highest ranks of the industry. To read this year's data analysis, please click here. To read the entire series, please click here.

When Harvard University awarded Tishman Speyer the rights to develop a $1B mixed-use project on land it owns in Boston, it came with a condition, a rarity for a private real estate deal: at least 5% of the equity in the project had to come from people of color.

It is the exact type of scenario the firm had in mind when it hired Joe Ritchie as its head of diversity and inclusion last year, and the deal is now emblematic of how the global development giant is anchoring its approach to diversity and inclusion.

“It's an example of how we can inject diversity into our projects in multiple ways at multiple levels,” Ritchie, who is also managing director for business development, told Bisnow in an interview this week. 

The 14-acre Enterprise Research Campus in Allston will feature life sciences space, housing, and a hotel and conference center. Tishman Speyer raised $500M for the 900K SF first phase, and from that some $30M came from individual Black and Latino investors — higher than the 5% goal — and $800K from white women. 

For Ritchie, this approach is what he describes as the “market-facing application of diversity” — and one he hopes will be replicated across the company.

“In order for diversity to be durable, in order for it to maintain a focus, we have to make it a business priority,” he said. “When we can shift the conversation from diversity being the quote-unquote ‘right thing to do,’ from it being a quote-unquote ‘moral obligation,’ to it being a business priority, then we can have lasting impact.” 

Ritchie is just one of a new class of chief diversity officers and heads of DEI in commercial real estate, a group of people who have taken on new responsibility and visibility in the aftermath of the murder of George Floyd in 2020. They are tasked with implementing policies that can be treated with skepticism by their colleagues, and many of them don’t stay in the job for long. 

Photo: Bisnow

“The kind of work that this person is being asked to do has often been claimed as the hardest job in business,” said Tina Shah Paikeday, the global head of the diversity, equity and inclusion practice at Russell Reynolds Associates.

Russell Reynolds is an executive search firm that has been studying chief diversity roles at S&P 500 companies for the last five years. Paikeday said some 70% of those corporate giants have CDOs, but their average tenure in the position is three years. It fell as low as 21 months in 2021, she said.

Head of Diversity roles doubled between 2015 and 2020, according to LinkedIn, while chief diversity officer roles grew by 68%. Many of those hires, Paikeday said, were “as an almost ‘check the box’ type exercise,” but weren’t given the resources to have much of an impact.

But after the summer of 2020 — when racial justice protests rippled throughout the country, as did corporate pledges to do better — any chief diversity officers with experience were flooded with recruitment calls as companies worked to make good on premises to diversify their ranks, she said.

“All of a sudden, there was high demand for a role where we had not groomed enough talent, and so basically the sitting chief diversity officers were being tapped out and we had to look into other areas to recruit the talent,” Paikeday said. 

Two years after the initial surge, the roles and experiences of chief diversity officers have moved far beyond a fancy new job title and a box checked for their employers. They are a group of professionals who face a slew of challenges every day, but also a meaningful opportunity to increase the equity of people previously marginalized by one of the most powerful, influential industries in the world.

“Diversity officers are a unique breed of people. You’ve really got to be committed to fostering growth and opportunities for those that have been historically marginalized,” Sterling Bay Director of Diversity and Strategic Development Keiana Barrett said. “You have to advocate very strongly for there to be a greater sense of equity and inclusion, and you’ve got to be artful in how you’re able to message your appeals to leadership internally.”

Since 2020, brokerages CBRE, JLL, Cresa, Cushman & Wakefield and Avison Young have announced diversity officer hires, as have REITs Equinix and Iron Mountain. Fannie Mae, Freddie Mac, Walker & Dunlop have appointed chief diversity officers in the last two years, PGIM Real Estate announced its first-ever chief DEI officer in April, and Barings created a chief diversity and inclusion officer role at the end of 2020.

“There has been an influx of diversity officer positions created, given the climate of the country. Many companies did that as kind of a knee-jerk reaction so they could socialize that they made a particular hire of color in that role,” said Barrett, who was hired in her role in 2019. “What I have found is about 3 out of 10 of those roles are not accompanied by a budget, and so in the absence of resources, dedicated resources to the work of DEI, you’re really at a deficit in the ability to impact the work.”

Photo: Courtesy of Sterling Bay

Sterling Bay Director of Diversity and Strategic Development Keiana Barrett

Some CDOs are encountering a workplace weary of diversity talk. Others are eager to keep inclusion front of mind as economic uncertainty chips at business leaders’ attention. 

As their goals, measurements and metrics vary widely, their success is increasingly difficult to quantify. Lack of resources, unrealistic expectations and heavy emotional labor makes these jobs extra vulnerable to burnout. 

“The burnout rate is so high because of the fact that they are not able to execute any tangible programming that is going to be credible and authentic and is really going to allow for there to be a true demonstration of earnest commitment,” Barrett said. 

These professionals don’t sugarcoat the pressures, challenges and complexities of their positions. But they said if there’s the right environment set down by a firm’s leaders — a real commitment with resources and an achievable set of goals — these roles can truly be transformative.

“Something that is looked at as charity … can fall by the wayside in times when there's a ground war in Europe for the first time in 80 years, where there's record inflation. That’s what we’re seeing right now, and a looming recession,” Tishman’s Ritchie said. “We really need to work on the discussion of diversity as it relates to business as the headline of the effort.” 

A former senior vice president at Brandywine Realty Trust, Ritchie joined Tishman Speyer in April 2021 and now reports directly to the chief financial officer. He said his position isn’t part of the human resources department, something he believes sets him apart from many CDOs in the industry. The company is tracking diversity among its employees (he declined to provide metrics or hiring targets) but Ritchie views the main objective of his position as hitting business goals through diversity.

He is working on a supplier diversity initiative through which Tishman aims to triple its corporate spend with minority- and women-owned businesses by the end of 2024, and a collection of initiatives aimed at making sure local women and minorities are employed on projects across the portfolio. This week, the company became the first global partner of Project Destined, a social impact platform that provides training in financial literacy and entrepreneurship for the industry.

Unconscious bias training and recruiting and retention are all valuable elements of pushing diversity forward at the global development firm, he said, but not something that takes up most of his focus.

Photo: Courtesy of Tishman Speyer

Tishman Speyer Managing Director and Head of Diversity and Inclusion Joe Ritchie

“I spend the majority of my time thinking about our core businesses and how we center and prioritize diversity in the execution of those core businesses,” Ritchie said, pointing to his background as a developer as to what drives his approach. 

The influence and effectiveness of these roles vary by the company and their strategy and values.  

“My sense is for those DEI professionals who report to the CEO and who have a budget, I think that's authentic,” said CEO of D.C.-based Jarvis Commercial Real Estate Ernie Jarvis, who has been a vocal critic of the lack of diversity at the highest levels of the industry.

He said the real measure of success will be if these positions drive greater diversity of talent at the top levels of the business. 

"Recruiting young people, that's an important metric, but how many vice president level and above, how many market leaders of color advanced in the industry? How many C-suite professionals of color have advanced?” he said.

So far, not that many. Bisnow’s 2022 analysis showed people of color make up 11.6% of the C-suites and executives teams in 89 of the largest firms in the commercial real estate industry – a slight increase from 10.9% last year. Women make up 25.6% of CRE executive teams, compared to 23.5% last year. 

But Melina Cordero, a former CBRE managing director who left in 2021 to form her own diversity and inclusion consulting firm, said most companies are still working out exactly what a chief diversity officer role should look like. A big hurdle for success is what she calls “DEI fatigue,” as is its companion, “ESG fatigue.” 

“There's a little bit of like, ‘Oh, here we go again, talking about this thing doesn’t really do anything,” Cordero said. “We need to shift that conversation from, ‘It's not working’ to ‘Let's try this.’ Shift to more innovation and experimentation … I think it just needs to be infused with a bit more fresh ideas."

The CDO role itself has been around for decades, Paikeday said. It began first as a compliance measure, as the Equal Employment Opportunity Commission started asking firms to record diversity statistics. From that, large consumer companies like Unilever have typically used a chief diversity officer on the business side to successfully expand into markets and reach greater audiences.

In the decade leading up to 2020, she said, the role expanded beyond consumer brands, with some companies mixing the role with “talent management” and others making its own standalone position. The next iteration, she predicts, will be morphing back toward what she calls the business side. 

However, Paikeday noted the dearth of people who have worked as a diversity officer means people with less direct experience are getting hired to perform the position. Previously, a CDO would be appointed with at least 15 years' experience under their belt, an average that has gone down significantly, she said. 

“Most chief diversity officers who have experience understand that this is high-profile, critical, long-term change work, but for those who are doing the role for the first time, I think they can underestimate the amount of resilience, if you will, that is required in this type of role,” Paikeday said. 

The climate of the world now, she said, means the role is more demanding than ever — and appointing someone without experience can backfire. 

“What's critical is that you actually have the skills to do it and some training. It's not just making it up,” said Cedric Bobo, co-founder and CEO of Project Destined. “I think it's so challenging in real estate, for all the right reasons, that we have a lot of opportunities ahead of us.” 

Nashunda Williams is trying to seize on that opportunity after being named JLL’s head of DEI in February. 

Williams had been at JLL for six years, serving as senior director at JLL Technologies at the time of her appointment, when she took over from Ingrid Jacobs, who had been in the position for 15 months. Williams had no HR background and hadn’t served in a formal DEI role, but she had been working in what she called a “volunteer” DEI position for years and has long had a passion for leadership and diversity. 

Williams reports to JLL CEO Christian Ulbrich and works closely alongside the company’s head of HR, she said. Her job is focused on “making the company a better place to work” so that the company can recruit the best talent, as well as creating a workplace where workers “feel that they can be their authentic self.”

The company does have diversity hiring targets, but Williams declined to share them. 

“Some days I feel like I'm an intense data scientist, sifting through trends and insights, and then the next day, I'm like a psychologist looking at human behavior and how that drives inclusion,” she said. “The next day, I'm really tasked with uplifting and inspiring.”

Her first seven months have been about learning to set boundaries for herself and her team, she said. The role is still not well understood, and people sometimes expect change to be immediate. 

“You could easily get burnt out. In the first couple of months, I will admit it was challenging for me because I didn't know how to have those boundaries,” she said. “It does get taxing because you do have, at any time, maybe 10 to 20 different groups wanting different information. And that’s why you will not last in this space, unless you protect yourself, protect your time.”

Jon Banister contributed reporting for this story.

CORRECTION, NOV. 17, 11:50 A.M. ET: PGIM Real Estate appointed its first chief diversity officer in 2021. Its parent company PGIM appointed a CDO in 2016. An earlier version misstated which entity made the appointment.