Read This CRE Exec's 10-Point Plan To Fix The Industry's Diversity Problem

Ernie Jarvis has long been frustrated about the lack of diversity in commercial real estate, with so few black professionals at the level of the industry he has reached. 

A 35-year D.C. real estate veteran, Jarvis spent 22 years with CBRE, where he rose to the position of D.C. market leader. He then left to lead the D.C. market for First Potomac Realty Trust, a REIT that was acquired by Government Properties Income Trust in 2017 for $1.4B. In 2016, he launched his own firm, Jarvis Commercial Real Estate. 

Now, as the killing of George Floyd and the massive protest demonstrations have sparked a new dialogue on race and diversity in the industry, Jarvis is pushing companies to take action.

He came up with a 10-point plan for brokerage firms to improve their diversity, a goal many companies have expressed but have yet to make meaningful progress on. The steps he recommends would give executives a road map to recruit and promote more African Americans, support black employees within their companies and partner with black-owned businesses to help them achieve success. 

Jarvis sent the plan in a letter Friday to the CEOs of several major global brokerage firms, and he said he has received responses from multiple executives. He has given Bisnow permission to publish his letter in full. It is below.

June 5 letter from Ernie Jarvis to commercial real estate executives: 

As an African American commercial real estate brokerage executive, I am profoundly exhausted about discussing the lack of diversity in the commercial real estate brokerage industry. While I am genuinely heartened by the show of corporate support for diversity and inclusion during these tumultuous times, the industry has a long way to go before it authentically reflects the culturally rich and diverse cities and communities in which we operate. The industry has the potential to do better.  

I pull my comments from over two decades of experience as a broker, a brokerage market leader for a major U.S. city, a senior leader of a publicly traded REIT, and an industry leader in our nation’s capital. I offer the following solutions. Please note that these recommendations are sent to executive leaders of major brokerage firms in hopes that there will be a renewed industry-wide, credible commitment to diversity and inclusion to expand minority professionals who have P&L responsibility and to expand the numbers of revenue producing brokerage professionals. I am compelled to share for the sole reason of contributing to the industry. After all, I live the African American real estate experience daily.  

You may ask what are my bona fides to discuss race? My grandfather, Dr. Charles R. Drew, the noted African American surgeon and blood plasma pioneer, is the founder of the American Red Cross Blood Bank. He resigned as African American blood was segregated when there is no scientific reason to do so. My cousin, Fred Gregory, was the first African American astronaut to fly on NASA’s Space Shuttle. He flew on three missions and was the first African American commander and first Shuttle captain. My mother is a six-term elected official. My wife is a senior-vice president at Howard University, the most prominent African American university. I am unapologetically African American.  

African American Hiring, Support and Promotion  

I realize that many companies have standing diversity initiatives. Respectfully, may I suggest a recommitment? Frankly, as I peruse the leadership pages of company websites, there is very little, and certainly not enough minority representation. Not surprisingly, there continues to be a dearth of minority regional leaders and senior brokers, nationally. How to address:  

• Recruit African American executive leaders and regional leaders from other sales related industries, and pair them with internal leaders who have a more in-depth real estate background. This co-executive structure provides credibility within the company while the newly hired leader becomes educated and more familiar with [the] industry.
• Companies must develop a pipeline of minority regional leaders. The leaders can be uncovered during the recruitment process above, or by identifying brokers who demonstrate leadership capabilities, especially those who have strong market-facing capabilities. The co-regional manager may be the ideal structure. Some would say this is an affirmative action program, but I respectfully disagree. I submit the “who-you-know” industry entry is, as a practical matter, an affirmative action program. Please keep in mind, African Americans don't have access to this network.  
• Company executives must make a real financial commitment to deploying resources to regional leaders for the recruitment, training, and advancement of African Americans. As part of their compensation structure, many regional leaders are mandated to recruit people of color. Similarly, regional leaders should be penalized if those recruits are unsuccessful.

The road map to success for those recruits is as follows:  

• Recruits to be mentored by an executive leader with a thirty-minute bi-monthly call to discuss challenges and progress.
• Recruits should also be mentored by regional leaders with thirty-minute weekly meetings. Breakfast or lunch meetings would be ideal, as out of office meetings are more candid and intimate. Mentees should also accompany regional leaders to events to build a social network.
• Assign a senior broker mentor who understands the obstacles to success and who understands the inherent cultural differences of those who come from minority communities. Successful brokers aren’t always the best mentors.
• Ethnic minorities must be placed on inbound company assignments. While senior brokers will certainly object, the company should slightly reduce its split portion to incent the senior broker’s participation. It provides an opportunity to learn the process and develop capabilities.
• Expand opportunities for minority brokers in capital markets, investment sales, multifamily sales, and agency leasing. Companies may be required to deploy financial resources for this. I believe occupier services, or tenant representation, is the most difficult business line for minorities initially as we don’t have established networks that generate this kind of new client opportunity.

Partnering with Minority Brokerage Firms 

• Establish partnerships with minority brokerage firms by making an equity investment in these firms, and partnering on business pursuits that aren’t required by a public sector or corporate RFP, i.e., law firms, nonprofits, etc. There should be a corporate mandate specifying a percentage of assignments that require minority partner participation, say, 100K SF. I strongly believe this matches the atmospherics of the client, meaning decision makers are becoming more diverse. Hence, there is a strong business case.  
• There is an additional benefit of partnering with minority owned firms in the pursuit of institutional assignments, where annuitants are demanding more diversity in their service providers.
• Help these companies develop brokerage capacity with future growth in other business lines such as asset serves and corporate services.

Recruitment 

Robust recruiting at Historically Black Colleges and Universities (HBCU’s) such as Howard University, Morehouse College, Spelman College, and Hampton University, Wall Street firms and corporate America appear to have found success in the pool of talent. 

The composition of senior management teams and brokerage professionals cannot become more diverse without a financially committed effort. I am hopeful that this period will be known for more than a few donations or really cool memes. 

Ernest Drew Jarvis is the founder and CEO of Jarvis Commercial Real Estate.