Putting Points On The DEI Board: Walker & Dunlop Reflects On The First Year Of CREUnited

George Floyd’s murder in 2020 and the growth of the Black Lives Matter movement have been catalysts for change throughout society. This includes efforts to bring greater diversity to professions like commercial real estate that have long been dominated by white men. 

In the past couple of years, organizations have forged partnerships and launched initiatives to improve diversity, equity and inclusion both in their offices and across the broader CRE community — but progress has been slow. 

The percentage of people of color at the executive level of America’s largest CRE firms rose from 10.9% in 2021 to 11.6% in 2022, according to data collected by Bisnow. The representation of women, too, grew somewhat, to nearly 26% of executive teams. But clearly, there is much more work to be done.

“CRE made limited progress on diversity in 2022,” a recent Bisnow special report concluded. “Advocates worry momentum is waning.”

TJ Edwards, chief production officer of Walker & Dunlop’s multifamily finance group and a leader in the CREUnited alliance, understands those concerns. His company launched CREUnited in 2021 to work with partners such as Fannie Mae and Freddie Mac, KKR and Greystar to increase minority representation in the industry and to grow the number of assets under management by underrepresented groups. 

Edwards noted that these alliances are vital because people, not press releases, are what will lead to real change, particularly if CREUnited is to meet its ambitious goals. These goals include creating new ways for minorities to access established professional networks, expanding minority firms’ access to debt and equity capital, and addressing the technology, data and research gaps that can hold minority professionals back. 

“Having the right intentions and doing the right thing is awesome,” Edwards said. “But you need players on the field who will execute these initiatives and you need to put points on the board and get deals closed.”

Collecting data that the efforts are bearing fruit is vital. Edwards noted that lack of visible progress has been an obstacle to the success of similar well-intentioned efforts to increase diversity. 

He insisted that CREUnited is different, however, because in its first year, it helped facilitate more than $600M in CRE transactions involving minority companies. Results like that send a compelling message to people who might have grown weary during previous attempts to improve DEI.

“When I’m among my cohorts in the industry who look like me, I see people are exhausted,” Edwards said. “A lot of the folks in this business who have more gray hair than I have, when I told them we were launching CREUnited, their response was ‘here we go again.’ But I think we can do it differently this time by focusing on equitable business transactions and getting deals completed.”

One way CREUnited helps enable transactions — and gets points on the board — is by serving as an intermediary between established CRE institutions and promising minority-owned businesses. Some of these firms might lack industry contacts on a national scale, so sometimes it is a matter of Edwards or other executive members of CREUnited making a strategic phone call on their behalf to arrange a meeting. 

This made all the difference for one CREUnited minority partner, a property owner and developer.

“I called the heads of Fannie and Freddie Mac multifamily and said, ‘I want you guys to spend an hour with this individual,’” Edwards said.

His contacts with the mortgage giants were impressed enough with the sponsor and his business plan that they were willing to quote generous terms that ordinarily wouldn’t be offered to a small-scale developer that had walked in off the street, he said. 

“It is part of Fannie and Freddie’s mission to work more with women and minorities, and they realized that here was an exceptional platform and an exceptional individual,” Edwards said. “They said, ‘We’re going to do whatever it takes to get this deal across the finish line because we know for a fact this is going to launch their platform.’”

CREUnited has made similar introductions to Freddie Mac and Fannie Mae for other minority firms. One example is a 177-unit multifamily property in Los Angeles.

Walker & Dunlop’s Chris Montes, a director for the company’s multifamily finance team, originated the financing and helped facilitate the closing on behalf of the client, Langdon Park Capital, and Freddie Mac for $14.2M. This was the first time LPC had worked with either Walker & Dunlop or Freddie Mac.

“Our alignment with LPC extends out to our corporate diversity initiatives and overall culture as a company,” Montes said. “We had colleagues of Latino/Hispanic origin working on multiple functional aspects of the loan. The entire team was honored to help on this acquisition and looks forward to many more.”

In another deal, Walker & Dunlop provided the financing on the $124M sale of The Avanti, an affordable residential community in Maryland, for sponsor Dantes Partners and Fannie Mae. 

Walker & Dunlop Managing Director John Gilmore said the transaction represented the second acquisition of NORE Fund I LP, a newly formed co-general partner fund managed by Dantes Partners and L+M Development, with additional LP equity provided by Jonathan Rose Cos. through Rose Affordable Housing Preservation Fund V LP.

Fannie Mae utilized the Sponsor-Initiated Affordability program, which includes 20% of the units restricted at 50% of area median income and 20% of the units restricted at 80% AMI.

“Walker & Dunlop not only recognized the disparities in minority participation and access to capital and but also sought out to take actionable steps to make changes in the commercial real estate industry,” Dantes Chief Operating Officer Corey Powell said. “Preparation met opportunity in the form of this initiative, and our ability to create and preserve affordable housing has been accelerated since working with the Walker & Dunlop team.”

Edwards said this process of making introductions can serve as an antidote to whatever unconscious bias a minority CRE professional could encounter in a first meeting with a lender. 

But if minority participation in CRE is to improve, then longer-term initiatives are required as well. That is why Walker & Dunlop also is involved in initiatives to introduce young people to the industry and develop future CRE leaders. 

These include being a corporate sponsor of Rutgers University’s Center for Real Estate in Newark, New Jersey. The program’s goal is to provide young people with real-world CRE experience. 

Similarly, Walker & Dunlop works with Project Destined, which offers CRE educational opportunities to underserved youth at the high school and college levels.

“Investment banker Cedric Bobo, who runs that program, wants to teach kids about the opportunity of being an owner of something, whether it's owning your business or owning your own personal brand,” Edwards said. “By teaching that through real estate, he’s opening up the eyes of Black and Brown students to an opportunity to have a very successful career and build wealth.”

Edwards said efforts like this not only create career paths for young people but also benefit the CRE industry because they “create a great pipeline for organizations like Walker & Dunlop to hire diverse talent out of college.”  

Edwards said his second-year objective is for CREUnited to facilitate more than $1B in transactions involving minority and women CRE professionals. He said it is an attainable goal, but admitted it faces challenges other than battling endemic racial and gender bias, conscious or not, or encouraging more people to consider a CRE career.

“There's a lot of momentum around DEI right now across all of corporate America, but we would be foolish to think it is going to last forever because the minute something happens, like the war in Ukraine or inflation, our focus is going to shift,” he said. “How do we keep the momentum? At the end of the day, when you tie diversity, equity and inclusion to the positive impact on the bottom line of an organization, that is how the effort begins to sustain itself.” 

This article was produced in collaboration between Walker & Dunlop and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.