- The killing of George Floyd by police touched off a movement for equality.
- In New York’s real-estate industry, long a bastion of white privilege, professionals of color say that barriers still exist.
- For years, real-estate firms have said they will diversify their ranks, but progress has been slow.
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New York City’s commercial real-estate business has long been ruled by an overwhelmingly white cast of billionaire family dynasties, public companies, and large corporate owners.
Yet even as the death of George Floyd has stirred pledges from C-suites across America to challenge barriers and biases, the prospect for near-term change remains uncertain in the insular industry.
People of color who have managed to break in describe a business built on personal connections, family legacies, and professional pedigrees that are difficult for outsiders to replicate. With few senior Black executives to champion and steward a more diverse generation of entrants into the business, diversity has remained stalled for years.
“If you look at the people who go into commercial real-estate and you look at how they got into the business, many had a relative, a close friend, or a neighbor who was in the business,” said Sean Black, a leasing executive who started his own commercial leasing brokerage three years ago after working for years at major firms such as JLL, Cushman & Wakefield, and Newmark Knight Frank. His parents are Jamaican, and he identifies as mixed raced.
“I do believe there are a lot of people who really can’t access this industry because they don’t have an entry point,” he said.
Eric Yabro, founder and CEO of Madison Square Realty and an executive managing director at Colliers International, is among the few Black brokers to rise to such a high perch in the industry. He sees real estate as similarly walled off to young Black professionals.
“People come into this business because they have a real-estate degree that their family paid for so they can go into the family real estate business,” Yarbro said.
“You’re competing with a legacy of family-run business and when you go to them and ask them to hire a recent Black graduate it’s like you’re asking them for a favor. And in this business, people don’t do favors. They want to know the return on investment.”
How the real-estate industry has responded
Business Insider took a look at responses from major players in New York’s real-estate industry, including both public statements and communications to employees. Many firms said that they had not done enough to create opportunities for diverse candidates. Several have not issued public statements or communicated on the topics of race and inclusion.
Vornado and SL Green, for instance, which together own about 45 million square feet of office space in Manhattan – almost 10% of the entire office market – did not post public statements speaking to George Floyd’s killing or the persistent racial barriers in society and business and did not appear to make any pledges to diversify. Neither has a Black executive on its management team, nor any Black board members.
Vornado and SL Green didn’t respond to repeated requests for comment for this story.
“It’s troubling,” Scott Rechler, chairman and CEO of RXR Realty, told Business Insider, speaking to major real-estate players who remain silent during such a watershed moment. “This is a moment in time where there’s a broader recognition that this is a systemic, institutional issue and that there’s an opportunity to really take action.”
“I don’t think that the lack of thought leadership and diversity is unique to the real-estate industry, but that also doesn’t mean it’s right,” Rechler said. “In the real-estate business, we’re uniquely equipped to create change because we build communities.”
Other major builders, though predominantly white, suggested they would make diversity a priority.
Related, the large development and investment firm erecting the nation’s biggest private construction project, a $25 billion collection of office, hotel, retail and residential space in the Hudson Yards, said it would create a task force led by Jeff Blau, the company’s CEO, and Kenneth Wong, its chief operating officer, to increase diversity.
“The task force will specifically focus on creating more career opportunities and educational programs (both within Related and our industry), as well as supporting black and minority owned businesses,” Related’s executive team said in a statement distributed to the roughly 4,000 employees on June 5.
Tishman Speyer, another major builder in the city that’s in the process of raising a nearly 3-million-square-foot office tower in the Hudson Yards that will be anchored by the pharmaceutical giant Pfizer, said in a June 1 statement that it was “committed to doing our part in fostering inclusion for everyone, now more than ever.”
Of the over 100 people on the executive team for Tishman Speyer, only one is Black. The company stopped short of laying out any specific diversity mandates.
“We are deeply committed to fostering a culture of inclusion, combating inequality and racism, and hiring more Black employees in all facets of our business,” a Tishman Speyer spokeswoman told Business Insider.
CBRE, the nation’s largest commercial real estate services and brokerage firm, said in a June 9 statement: “our company and industry need to do more.”
Factors that perpetuate exclusion
Yarbro, who has long advocated for more diversity in the city’s real-estate industry, stressed that one of the chief factors for change was cultivating high-ranking Black executives and owners.
He said that could be quickly accomplished if major real estate firms took on minority-owned investment partners, especially in the communities of color that many real-estate developers have helped gentrify with glitzy new residential projects in recent years.
“There’s not one Black owner from 125th Street to Battery Park in Lower Manhattan, not one,” Yarbro said. “Major landlords will tell you ‘well I’m investing other people’s money and our structure doesn’t allow us to take on a minority partner.’ I hate to say it, but it’s all bulls—.”
Yarbro pointed to other areas of the economy, such as construction, where the state and city have imposed rules that mandate the hiring of women and minority-owned contractors on civil construction jobs.
The effort has fostered minority participation and business ownership. If elected officials had mandated that minority real-estate investors be allowed to invest in a mega-project such as the Hudson Yards, for instance, Yarbro said, it could have ushered a generation of Black real estate professionals into the business.
Those leaders in turn could have helped feed business to an ecosystem of related professions involved in development, such as architecture, financing, and brokerage.
“In minority communities, we don’t come from a background owning property,” Yarbro said. “For the business to change, that has to change.”
For now, the city’s real estate industry remains predominantly white, and mostly male.
The largest brokerage firms, CBRE, Cushman & Wakefield, and JLL, for instance, don’t have a single Black vice-chairman, the senior-most brokerage title at each firm, in New York, where all three base their biggest offices nationally. The firms, which handle billions of dollars of office leasing transactions and the sale of commercial property assets such as office towers and apartment buildings, also have few Black people in upper management.
One of 11 directors on CBRE’s board, two of JLL’s 12 directors and none of Cushman’s nine directors are Black.
The Real Estate Board of New York, a professional organization and powerful lobbying group, has just one Black member on its 52-person executive committee, which is a who’s who of top owners and billionaire landlords in the city.
A spokeswoman for REBNY said the organization itself has one senior staff member who is Black. Half of senior staff are “racially diverse” and 40% are women, she said.
Business Insider found that among the major publicly traded real estate owners in the city — SL Green, Vornado, Brookfield Properties, Paramount Group, Boston Properties, and Empire Realty Trust — just one, Boston Properties, had a single Black board member.
Although bedrock diversity measures are scarce in corporate America, there are signs that real estate lags other industries. A two-year-old study by the professional services firm Deloitte found roughly 40% participation by women and minorities on the boards of companies in the technology, media, telecom, life sciences, and health-care industries.
Read more:
- A flagship Neiman Marcus store in the glitzy Hudson Yards mega-mall is being marketed as office space, showing how developers are making a big pivot as retail bankruptcies mount
- Here’s how to land a spot in real-estate giant CBRE’s ultra-competitive sales internship program that’s harder to get into than Harvard
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