November 19, 2024 by Taylor Driscoll and Ryan Wangman

Gen Z Is Fighting For A More Diverse CRE. Ignoring Its Demands Could Be 'Perilous'

This is Part 3 of the fifth annual installment of Bisnow’s DEI Data Series. Part 1 examined the diversity of the boards and executive leadership of the biggest companies in commercial real estate. Part 2 explored the political backlash to DEI efforts and how the landscape could change in the Trump administration. To read the entire series, please click here.

Enya Xu, 25, knew what she wanted before she graduated from Northeastern University in 2023.

As she wrapped up her master's degree in architecture, she was looking for a smaller firm that would provide her with a more active role in the sector and one that worked primarily on affordable housing projects. But more importantly, as an Asian American woman, she wanted a company that had employees who looked like her and shared her values.

Xu was offered a position as a project designer at JGE Architecture + Design, a minority-owned firm in Boston, and she has now worked there for over a year. When applying for jobs, she looked at leadership pages on company websites and didn't apply to ones without the type of diversity she was looking for.

“Am I going to be the only one? Am I going to feel like I fit in with the people who have already been hired?” Xu told Bisnow. “The [cover letter] that I've written for JGE came easier because it felt like my identity and what I wanted to pursue aligned with the mission I saw from the firm on their website.”

Generation Z, defined as people born between 1997 and 2012, is increasingly demanding employers adopt more diverse hiring and promotion practices, pushing for concrete actions to support DEI pledges and spearheading what may become a sea change for CRE’s diversity in the next decade, according to 11 industry professionals spanning generations whom Bisnow interviewed for this story.

Photo: Courtesy of Enya Xu

Enya Xu, right, and co-workers

Three-quarters of Gen Z respondents to a 2022 survey by recruiting platform RippleMatch said they would think twice before applying for a job at an organization if they weren't satisfied with its efforts to promote diversity and inclusion.

“Their generation is wildly more educated on social impact, global impact, climate impact, than any other generation before, and they actually care about it,” said Cresa Vice President Isabella Zelinger, a millennial leasing broker. “I feel like sometimes they get a bad rap because they're loud about calling out the issues.”

While some CRE companies are facing political backlash around the DEI policies they have implemented since 2020, industry experts say that resistance could weaken as Gen Z becomes a larger force in the workplace. Companies that have shelved DEI initiatives and programs could face challenges in recruiting younger workers.

“That's a really perilous kind of choice because Gen Z's percentage of our workforce is just growing every single day,” said Allison Weiss, the founder of CRE Recruiting.

Gen Z accounts for roughly 69 million people in the U.S. The Bureau of Labor Statistics projects it will make up 30% of the U.S. workforce by 2030.

The generation is more diverse than any generation older than it, with 39% identifying as Hispanic or Black, compared to 22% of baby boomers who identify that way, according to census data.

“Gen Z is the most ethnically and racially diverse generation, and so I think from a value standpoint, they're going to value DEI … much more than any other preceding generation,” Weiss said. “They also have really strong convictions towards working for companies that align with their values.”

 

'Not Just Fluffy Corporate Speak' 

When Micah Gray, 26, was first on the job hunt, he was looking for a company that had a vibrant culture and wasn’t “corporate, blue tie and gray hair.” He found NAI SunVista, a brokerage in Albuquerque, New Mexico, through word of mouth after networking and meeting with a few brokerage firms. He began working there in 2021.

Gray, who is Black, said diverse hiring and promotion practices are “super important” for him and his generational cohort, as is finding mentors within the workplace. He said it is critical to have representation that is reflective of the diversity of Gen Z and challenges the traditional expectations about CRE and finance.

“In [my] experience, you think of New York, and you think of a stockbroker in a blue suit, and not necessarily an African American with dreadlocks,” Gray said.

Gray is one of the older members of Gen Z — the majority are still in high school and college. But as more of the generation graduates, the percentage of the workforce it makes up keeps growing.

Gen Zers, also referred to as “zoomers” following the pandemic, have grown up in the age of technology and use it to connect and educate themselves in a way previous generations haven't been able to. Gen Z has tapped the information and platforms at its fingertips to vocalize hot-button issues like diversity, sustainability and housing affordability and seeks to align with companies that mirror its specific goals and beliefs.

More than half of Gen Z respondents to a 2021 survey said they would refuse to work at a company that doesn't share their values. 

Multiple members of Gen Z interviewed by Bisnow said they looked at the makeup of companies’ team pages on their websites to make sure their employers had a representative leadership suite before deciding to move forward with the application process.

Photo: Courtesy of Micah Gray

NAI SunVista's Micah Gray

“It took me two weeks to do,” Gray said about evaluating the diversity of companies he was interested in applying to. “I went through, and I just wanted to identify truly how many people are out there? And it wasn't a lot, I'll say that.”

Weiss said she has heard Gen Z candidates asking employers in interviews about what day-to-day steps they are taking to achieve their diversity goals.

“They want to see not just fluffy corporate speak and buzzwords, but actual action,” she said.

Many companies began to take action on DEI in 2020 after the racial reckoning sparked by the death of George Floyd. That movement appears to have helped improve diversity in the leadership ranks of commercial real estate — Bisnow’s annual investigation has shown increased percentages of people of color and women in C-suites and boards for each of the last four years. This year’s investigation into 100 of the largest firms, published last week, found that their C-suites are 14.5% people of color and 27.2% women.

However, some companies have begun to pull back on these initiatives. Facing vocal opposition from conservative politicians along with new legal challenges spurred by last year’s Supreme Court ruling against affirmative action in college admissions, firms have softened their language around diversity initiatives and hired legal experts to evaluate risks in their hiring practices.

These anti-DEI efforts are expected to have more influence after President-elect Donald Trump takes office in January. His election was boosted in part by a faction of the Gen Z population that has shifted to the right: white men. A Tufts University analysis of voting data found that Trump won young white men by a 28-point margin this election, whereas Biden had won them by 6 points in 2020.

Given Trump’s vocal opposition to DEI, this suggests that a portion of Gen Z may not see diversity as an urgent issue for companies to address.

Chloe Cypers, a white Gen Z commercial real estate agent for Legend Partners in Salt Lake City, said diversity isn’t a top focus for her and her friends who are looking for jobs. She said people are more concerned about salary and opportunities for advancement than about the racial or gender makeup of the company.

She has a community of women in the Utah commercial real estate industry that she appreciates being around given that it is a “white, male-dominated field,” but she doesn’t see diversity as a top factor in her career decisions.

“I don't know if having a diverse culture would be a selling point for me if I were to make a move,” she said. “I appreciate when there’s different perspectives and different minds working on projects and such, but I wouldn't say it's a deal-breaker for me.”

But priorities vary widely across the industry, and JLL’s internal research shows that Gen Z candidates consider DEI a top attribute when evaluating an employer, according to Nashunda Williams, the firm’s global head of DEI.

To attract talent, Williams said the brokerage reduces the financial barrier to entry for transactional roles like brokerage positions and partners with organizations that pass along entry-level talent.

Additionally, JLL has invested in career development programs and resource groups to integrate new hires into the company, Williams said. The brokerage has had recruiting success by focusing on personalized outreach when inviting candidates to apply to roles, she said.

“We recognize how competitive the hiring landscape is today and that in order to resonate with talent, we have to help them see that JLL is an employer of choice by showcasing our culture of inclusion and belonging in a meaningful way,” Williams said.

Inland Real Estate Group Chief Operating Officer Cathleen Hrtanek, whose firm has over 1,000 employees, says its corporate office in Oak Brook, Illinois, has “a bit of an aging workforce” and hiring young people is a challenge that the firm’s executives think about often.

She sees diversity as “part of the total package” that young employees are looking for, and the company also wants to promote diversity for the financial benefits — studies have found companies with the most ethnic and gender diversity outperform their less-diverse peers.

“We do believe that a diverse workforce is going to go right to the bottom line,” she said. “We do think that diverse ideas and backgrounds really help with profitability.”

 

'Break That Cycle'

Gen Z employees looking at the state of DEI programs and initiatives told Bisnow they see more that needs to be done.

Photo: Pexels/Emily Ranquist

As Gen Z continues to graduate college, it is becoming a larger share of the workforce.

“DEI is important — if it's done the right way,” said Rameen Inayat, a 25-year-old property tax consultant with Altus Group who is Pakistani. “It's kind of becoming evident that some companies just want to fill a quota of, ‘Hey, this is the amount of diversity that we have.’ So it'll let us get our foot in the door, but we wouldn't get any opportunities to really move up and actually excel in our careers.”

Sharing success stories and experiences from underrepresented groups in the industry can help spread the word that CRE is a career path to consider, Gray said. With a more diverse Gen Z cohort steadily streaming into the workforce, Gray said CRE’s leadership ranks will eventually reflect the evolving makeup.

“It's an ongoing process,” Gray said. “It's happening right now as we speak, and in the next 10 years, I think it'll be an exponential difference.”

Taneshia Nash Laird, executive director of Project REAP, a nonprofit that empowers minority commercial real estate leaders nationally, said that although there has been a concerted effort by politicians to pull back on projects and initiatives aimed at promoting diversity, she is still seeing many corporate partners actively looking for diverse talent from her company.

“There is a concern around the dismantling of these initiatives, but I'll tell you, I don't look at it from that perspective in terms of producing DEI candidates,” Nash Laird said. “We look at what we're doing as producing excellence.”

She said a significant portion of the nonprofit's budget comes from corporate sponsorships because they see REAP as a way to attract the younger generation. The company’s sponsors include Amazon, Clarion Partners, Walker & Dunlop, Jamestown and Piedmont Office Realty Trust, according to its website.

To continue to improve diverse hiring practices, top-level managers need to be coached on new ways to identify talent and given target metrics for the diversity of their recruits to encourage them to follow through, said Cresa’s Zelinger.

“If you're a managing partner, if you're in human resources, if you're in talent acquisition, you have to break that cycle a little bit to go to communities, to individuals that maybe don't have the … background that will help them rise into real estate, and that's not as innate,” she said.

She likened the idea of hiring metrics to working with a personal trainer who would only agree to train someone who commits to working out several times a week, even if early results take time to show.

“Similarly, these partners have to be told you are required with your title to do this many times a year, and it's going to take two or three freaking awesome hires for them to see that there was value in it,” Zelinger said. “They're going to have to be held to a metric, execute on the metric and give that metric enough time to see that talent has come in and has succeeded.”