November 29, 2023 by Emily Wishingrad, Matt Wasielewski, Olivia Lueckemeyer, Bianca Barragán and Ethan Rothstein

SPECIAL REPORT: Diversity In CRE Is Rising, But The Industry's Troubles Threaten Progress

This is the fourth 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 the entire series, please click here.

The year 2023 will be remembered by real estate for many things — a rise in layoffs, bankruptcies and foreclosures, and a decline in property values and transactions.  

But despite the grim reality of the moment, the leadership ranks at the industry's largest firms have never been so diverse. 

People of color make up 12.8% of the C-suites at 89 of commercial real estate's largest brokerages, developers, finance firms and real estate investment trusts, up from 11.6% in 2022 and 10.9% in 2021. Women in the C-suite have seen their representation increase to 26.2% this year from 25.6% in 2022 and 23.5% in 2021.  

That slow but steady progress is found in this year’s installment of Bisnow’s DEI data series, a multiyear investigative project started in 2020 amassing statistics on the diversity of the boards and executive leadership of the biggest companies in real estate.

The most significant change this year is the number of companies that have diverse leadership at the very top. There are 10 women serving as CEOs this year, up from six in 2022, and eight CEOs of color, up from five last year.

Women now hold 31.9% of board seats, up from 29.6% last year. People of color make up 19.6% of boardrooms, compared to 18.3% last year.

But progress remains uneven, and real estate executives who spoke to Bisnow for this series said they fear the deeply troubled real estate market will hinder further advancements. It has become a lower priority, they said, as the industry fights for its survival — and the fact remains that the vast majority of C-suite roles and board seats at these firms are held by white men. 

“The commitment is waning and fizzling away,” Savills Vice Chairman Ernie Jarvis said. “I do feel more optimistic that there are people behind me, but certainly not enough.” 

Photo: Unsplash/Christina @ wocintechchat.com

Commercial real estate sales have fallen by more than 50% this year, and leasing has slowed. Brokerage shops have faced staffing cuts, and diversity backslid at many of those firms. Private developers also haven't gotten much more diverse as interest rates have challenged their business.

But other than how difficult the environment has been — and how many diversity-focused jobs seem to be at risk — the theme that emerged in the interviews Bisnow reporters conducted is that the companies that have established long-term diversity, equity and inclusion plans are more likely to stick to them than companies that just looked to hire a chief diversity officer in the last two years.

“You still have many people who think of diversity and talent strategy — anything but revenue production — as a ‘nice-to-have,’” said Ryndy Ditmars, general counsel and chief human resources officer at Cresa. “If you’re cutting things, your sights get shortened, and diversity and talent strategy is the long game.”

The majority of the growth this year came in the commercial real estate finance sector, where some large private equity firms and banks expanded their executive ranks, bringing more diverse people to the decision-making table.

Brokerage and development, the two sectors that have arguably been most impacted by the historic rise in interest rates and the corresponding drop in transactions, saw less progress, and executives in the field said the economy was partly to blame. 

“Things are more difficult across the board. It's more difficult to get financing today than it was yesterday, and so that difficulty manifests itself on the diversity side as well,” said Joe Ritchie, managing director for business development and DEI at Tishman Speyer. “But it's part of the strategy. It's part of what we're doing. It's good for our business, regardless of the point where we sit in the cycle.”

 

Racial and ethnic diversity in the C-suites of the firms that dominate the commercial real estate capital markets took a significant leap, as companies not only replaced outgoing executives with more people of color but also expanded their upper echelons to provide more opportunities for senior roles.

People of color made up 18.8% of C-suite roles at 23 of the biggest private equity firms, life insurance firms and lenders this year, reversing three years of declines — they held 14.9% of those roles last year, 15.2% in 2021 and 15.4% in 2020. 

The number of women in the C-suites of these firms had stayed relatively flat but ticked up this year to 26.7% from just under 26% last year. 

“A lot of companies are talking about the DEI. I see that across the board,” said Katie Schwarting, a partner at law firm Seyfarth Shaw and the member chair of the governance and best practices subcommittee of the CRE Finance Council. “People are still working on the implementation phase of it. Those are two different things.”

While C-suites have seen a marked shift in representation, not much has changed on the boards of these firms. 

Fifty-five people of color hold board seats at the firms Bisnow tracked, the same number as last year, while there are two more women, who now hold 35.9% of boardroom seats. 

The stagnation comes after people of color gained 2.2 percentage points in representation on boards across capital markets firms in 2022, while women saw a 4.4-percentage-point bump. 

While representation looks to be growing across C-suites, most of the gains in 2023 were driven by two firms that expanded their executive ranks and staffed those positions with a diverse cohort of professionals. 

Brookfield Asset Management added eight executive positions in 2023 and increased the number of people of color in its top ranks by seven. Citigroup expanded its executive team from 17 to 19 positions, adding three people of color to its C-suite. Brookfield also added seven women to the executive level. 

Most notably, Fannie Mae named Priscilla Almodovar, a woman of Puerto Rican descent, as its CEO in December, pushing the total number of women in the top spot to three of the 23 capital markets firms tracked by Bisnow, or 13% of CEO positions. Almodovar also increased the ranks of people of color CEOs from two to three executives. 

Photo: Unsplash/Christina @ wocintechchat.com

Sharifa Anderson, Fannie Mae’s chief diversity and inclusion officer, said in a statement that reflecting the demographics of the country in its leadership ranks empowers Fannie Mae to identify opportunities in a tighter lending environment. 

“As economic and housing conditions continue to evolve, I believe we as an industry will be better poised to withstand the headwinds if the housing industry’s workforce better reflects the diversity of the nation and the homebuyers and renters we serve,” she wrote in an email.

In her role at the CRE Finance Council, Schwarting is working on the rollout of a self-reporting diversity scorecard for member companies that would track their overall progress toward representation as well as the performance of individual executives on benchmarks like the use of inclusive language and understanding unconscious bias. 

The goal, she said, is first to bring awareness to where an executive and their company stand in terms of representation, but then also to have the opportunity to convince decision-makers that a diverse workforce opens doors for new business. 

“We want to now show you that diversity really makes economic sense,” Schwarting said. “Diversity isn't something that should just be sidelined or checked off. It's something that will actually make your business richer, will create new opportunities.”

The challenges facing the industry have led other firms to decrease the size of their executive ranks, which in some cases led to the elimination of roles that had been filled by women and people of color.

Barings eliminated six executive roles in 2023, including three women. Walker & Dunlop shed two executive positions in 2023, including the removal of one female person of color from its top ranks. It was the only firm to reduce its representation of people of color in its executive ranks, but a contraction of roles at three other companies — Northmarq, Barings and Capital One — led to 16 fewer positions and the departure of six women from the top ranks.

Walker & Dunlop's head of diversity, equity and inclusion, Irelynne Estevez-Waller, said the mortgage banking firm remains committed to promoting diversity in its upper ranks. Along with annual diversity goals, it has created a road map to inclusivity that it calls the Drive to ’25. The majority of firms in the space also have long-term DEI road maps.

“What doesn’t get measured doesn’t get done,” Estevez-Waller said, adding that the company still has to contend with market realities — it laid off 8% of its staff in April. 

“It's a very tight economic environment and a difficult time across the commercial real estate industry,” Estevez-Waller said. “I would say the decrease [in the executive ranks] is not a decrease in representation. It's a decrease in staff across the board. But through that, we remain absolutely committed to continuing to close the diversity gap and continuing our focus on diversity and inclusion.”

DEI experts within and outside of these capital markets firms stressed in conversations with Bisnow that the push to create more inclusivity at these companies was still in the nascent stages. But they said there was buy-in at the top level of firms for the continuation of initiatives that, in many cases, are only a few years old. 

“Diversity begets more diversity,” Schwarting said. “The more diverse you become, the more the people you look to hire and the talent you look at can be more diverse, and they are attracted to you because they see they can flourish.”

Diversity in the C-suites of the 25 largest publicly traded real estate investment trusts crossed the double-digit threshold this year, with people of color making up 11.9% of executive leadership, up from 9.7% in 2022.

In 2020, the first year of this project, there were just 10 executives of color in the C-suites at these REITs. Three years later, that figure has more than doubled to 22.

Women now occupy more than 1 in 5 positions at the highest levels of REITs, with their representation growing from 18.8% of C-suites in 2022 to 20.4% this year. Women now make up 32.8% of boards, compared with 30.4% in 2022, while people of color now account for 17.6% of board members, rising from 16.1% last year. 

“Over time, but especially over the last few years, there's been a concerted effort to focus more on increasing diversity among REITs,” BMO Capital Markets analyst John Kim told Bisnow. “And I mean, we're seeing it come to fruition.”

When Angela Kleiman, a woman of color, took over the top spot at Essex Property Trust on April 1 after serving as chief operating officer for the REIT since 2020, she raised the number of female CEOs at the 25 REITs from two to three and the number of CEOs of color from three to four. 

Essex is also an outlier in its top executive diversity. Three out of four of the REIT’s C-suite executives are women.

“It's unique,” said Kim, who covers REITs, including Essex. “I don't know if it's been concerted or not — if it's been on purpose or not — but it's been refreshing to see that they refreshed the executives in the company with a younger and more diverse group.”

Overall change in the makeup of executive leadership tends to be slow because turnover isn't as common as it is on boards, where companies have more representation for women and people of color. Equinix, for example, said in its 2022 sustainability report that three of the four recent additions to the board of directors were women or people of color. Of its 10 board members, four are women and two are people of color.

“It's been pretty broad-based. Every REIT, as far as the board composition, is getting more diverse,” Kim said. 

“I can't pinpoint the exact time, but there was a noticeable trend, or actions of companies, that they would replace retiring board members with someone who tends to have a different profile or where they would expand their board to make it more diverse,” he added.

Photo: Bisnow/Julie Littman

Angela Kleiman, left, was named CEO of Essex Property Trust in April.

In rare fashion, Iron Mountain made a swath of changes to its C-suite, significantly boosting the diversity of a group that previously included just one man of color. Of Iron Mountain’s now-12-person C-suite, four are people of color and two are women. 

While Essex and Iron Mountain made the most noteworthy changes this year, most REITs have taken the stance that diversity is worth continuing to push for. 

Prologis’ diversity at its highest levels didn't budge from last year, but Senior Vice President of Human Resources Nathaalie Carey told Bisnow in an interview that the company is still pushing to increase its representation.

“We know that there's room for improvement at the more senior levels of the organization,” Carey said.

The company’s co-founder and CEO, Hamid Moghadam, is a person of color, while the only woman in the C-suite is Chief Human Resources Officer Colleen McKeown. Those figures will change soon — Prologis announced this month it is adding three people to its executive team effective Jan. 1, including two people of color, one of whom is a woman.

Three members of its 11-person board are people of color and three are women. 

Carey, a Black woman who has been with Prologis since last year, said the company requires recruiters to seek out and present hiring managers with a diverse slate of candidates. She said the company hopes that by recruiting diverse candidates across the company, eventually those people will rise through the ranks and fill C-suite positions as they become available. 

“We want to be a company that continues to have opportunities to promote from within, which means that the talent pool that we're cultivating inside of our company also needs to be diverse,” Carey said. “That is another group of individuals that we want to have access to higher-level positions.” 

Host Hotels & Resorts Executive Vice President and Chief Human Resources Officer Mari Sifo, a Black woman, echoed the sentiment. Her hire in late 2022 doubled the number of people of color in the company's C-suite.

“The more that we develop people internally to be able to be ready for the C-suite role, that helps our diverse pipeline,” she said. “It's not just about attracting external talent, but it's also about growing talent within the organization to be ready for those roles in the future.”

There were some diversity setbacks in REIT C-suites: Alexandria lost a person of color when President and Chief Financial Officer Dean Shigenaga resigned, citing “personal family health reasons.”

Patsy Sciutto Doerr, who was hired by UDR as a senior vice president and chief ESG and people officer, left after less than six months in December 2022, according to her LinkedIn, leaving no women or people of color in the REIT’s seven-person C-suite. The company hasn't named a replacement.

For companies that are serious about continuing to improve the diversity of their leadership, Prologis’ Carey said there is a benefit to a comprehensive view of what the organization is trying to achieve.

“One of the biggest things that I encourage companies who are going down this path to really think about is having an actual DEI strategic plan,” she said. “A lot of companies focus on initiatives. And it's like throwing darts blindly. You really have no target. You’re not aiming.”

Diversity at the upper echelons of brokerages slipped this year as the sector trudged through one of its most grueling periods in recent memory.

Bisnow’s analysis found that this year, there are slightly fewer people of color and women in the C-suite and fewer people of color on boards at 16 of the nation’s largest commercial brokerage firms. The breakdown paints a grim picture of how priorities have shifted now that the pandemic-era emphasis on diversity has taken a backseat to surviving economic turmoil.

“We’ve already seen that diversity efforts have been put on the backburner and positions are being cut altogether,” said Dustin Sutton, owner and principal broker at Sutton Real Estate Advisors and founder of the Black Commercial Real Estate Network. “It has not been a priority, and I think this will be a major setback.”

There are 23 people of color in C-suite roles, down from 24 last year. Female representation in that group fell from 59 to 51 year-over-year. The declines came as C-suites overall shrank from 196 roles in 2022 to 176.

At the board level, the proportion of seats occupied by people of color declined to 12.6% from 13.6% last year, while female representation rose from 25.1% to 27.4%.

The industry notched some important wins for diversity — the promotion of Michelle MacKay to CEO of Cushman & Wakefield among them. But it also saw some of its most important diversity, equity and inclusion executives leave their posts, including Tim Dismond, CBRE’s first chief diversity officer.

“We’re starting to see all of those people in large commercial real estate organizations who ascended to the head of DEI are no longer there, or they’re saying, ‘The company is no longer supporting me anymore,’” said Jarvis, who was hired as a senior vice president at Savills in April. “They are feeling the fragility of their role because of market forces.”  

Elevating women and people of color to the highest positions of power requires an intentionality that often gets lost when executives are focused on dollars and cents, Cresa's Ditmars said.

Cresa's female representation stands out. Six of the firm’s eight top executives are women, and at the board level, there are five female representatives out of 13. 

Sharon Morrison, Angela Roseboro and Suellen Ravanas are some of the board’s more recent additions. They were appointed to help the firm achieve its growth objectives, and the hiring and promoting of diverse talent plays an important role in those efforts, said Ditmars, who is also a board member.

“If you’re just one woman in a room, it’s tokenism,” she said. “But now we’re part of the discussion. They’re not listening to what I have to say because I’m a woman. I just happen to be one, and I happen to be the voice in the room.”

Proclamations around the importance of diversity are being tested, and Jarvis said leaders of major brokerages are having to prove their mettle. 

Savills doesn’t have any people of color in its C-suite or on its board, but Jarvis said elevating vocal advocates like himself to the position of vice chairman goes a long way in proving the firm’s commitment to DEI.

“There’s only four African American vice chairmen in the industry,” he said. “These are the steps to take to groom people and to expose people to the company.” 

Future brokerage leaders have to start somewhere, but the business is notoriously difficult to break into because of its commission-based pay. That is why Savills’ junior broker development program gives recent college graduates a 15-month salaried opportunity to advance their careers in CRE. These types of tools are critical in recruiting people from disadvantaged groups who might otherwise shy away from CRE’s commission-based pay structure. 

“It’s really difficult business to be a successful broker. It takes a different level of risk profile, and historically it’s taken a different level of support,” Ditmars said. “I don’t think it’s by accident that it was wealthy white men who were in commercial real estate, because they could actually afford to have a bad year.”

 

Women have made considerable strides at the top of development firms, but the sector's highest levels haven't seen representation improve for people of color.

Women hold 29.2% of positions in the highest ranks of these developers, up from 25.7% in 2022 and 20.8% in 2021. People of color made up just under 8.7% of the C-suite at the 25 companies Bisnow surveyed — a percentage largely unchanged from last year. 

The pool of companies measured this year differs slightly from previous years. Lincoln Property Co.'s residential arm was bought by Cadillac Fairview, while it was determined that two other firms Bisnow previously included in this category — Red Development and Madison Marquette — didn't have the same scale as the other companies being tracked. 

In their place in the index, Bisnow is now tracking life sciences developer DivcoWest, apartment giant NRP Group and Bridge Investment Group, which builds multifamily, single-family rentals and industrial properties. None of the firms have people of color in their C-suites. Lincoln Property and Red also didn't have any C-suite-level executives of color, while Madison Marquette had three as of last year.

The change resulted in the total number of people of color in C-suites dropping from 38 to 35 year-over-year, corresponding to an overall drop in executives tracked from 432 to 401.

At these companies — which include skyscraper specialists like Tishman Speyer, Related Cos. and Silverstein Properties, as well as multifamily mavens such as Greystar, Alliance Residential and Mill Creek Residential — turnover is infrequent, as many are still run by the founding family.  

At Hines, the composition of the 16-person C-suite has remained unchanged for three years, with one person of color and three women. The average tenure of a C-suite member is upward of 20 years, Chief People Officer Stephanie Biernbaum told Bisnow. 

With that in mind, Hines focuses heavily on the tier of leadership just below the C-suite, what it calls its officer level, which is “essentially the pipeline into the executive committee,” Biernbaum said. 

That group consists of 23% women and 11% people who identify as an ethnic minority. From last year to this year, the number of women at the officer level and companywide grew 2% and 3%, respectively, according to data provided by Hines. Minority representation overall grew 2% but remained unchanged at the officer level. 

Biernbaum said Hines has focused on increasing transparency around the promotion process and what she called “career progression criteria.” 

“We've done a lot to write down, clarify and codify what it takes to get promoted to the next level [and] provide developmental support for people to make that transition,” Biernbaum said. “Just really aspiring to not have it be a black box for what it takes to get to the top.”

Biernbaum said it has been helpful to the momentum of the company on these fronts that Hines co-CEO Laura Hines-Pierce is demonstrably committed to these initiatives. 

“Laura has been such a champion and a sponsor for all of those, and so I think that's given us a lot of tailwinds,” Biernbaum said.

Hines-Pierce is one of three female CEOs in the 25 companies surveyed, along with Majestic Realty’s Reon Roski and Silverstein Properties’ Lisa Silverstein, who was appointed to replace Marty Burger last month.

One veteran developer told Bisnow she has seen small but meaningful changes, not only in the diversity of the field but also in the makeup of the people advocating for diversity. 

“It used to be that, as a person of color and a woman, I would feel the obligation to make sure that issues of diversity were raised. But now I find more often that those issues of diversity and inclusion are being raised by allies who may not be women or people of color,” said Beatrice Sibblies, founder of New York development firm BOS Development. “So I think there is a broader embrace of a common responsibility to fix the problem.”

Who companies hire and promote is driven by the values of those companies, Sibblies said. Any real forward movement in diversifying the top ranks of these developers will be because the commitment to making those changes is woven into the corporate culture and values of those companies, she said.

“The continuation of this change is not going to be driven by legislation,” Sibblies said. “It is going to be driven by the commitments of existing leadership.”

Katharine Carlon produced the graphics for this story. Miriam Hall contributed reporting.

CORRECTION, DEC. 1, 11 A.M. ET: Prologis Senior Vice President of Human Resources Nathaalie Carey started at the firm in 2022. A previous version of this story misstated the year she was hired. In addition, Cadillac Fairview acquired Lincoln Property Co.'s residential arm, not the company as a whole. This story has been updated.