Oct 13, 2022
This resource has been updated with information from our 2022 Diversity Disclosure Practices: Diversity and leadership at Canadian public companies report.
Commercial real estate is an industry that is often viewed as lacking in diversity. Progress both before and after 2021 can best be described as incremental, but steps are being taken to move the needle forward.
Setting targets for change
In Canada, the Commercial Real Estate Equity and Diversity Council was recently formed to help diverse communities remove systemic barriers. Along with developing a mentoring program, the council will be encouraging companies to develop and implement diversity principles and to set targets for instituting change. The organization plans to be a resource for companies wanting to get started with a diversity program.
In 2020, the Ontario Real Estate Council created a Presidential Advisory Group to help create an action plan to eliminate racism and promote inclusion. A key focus is on encouraging more diversity and inclusion in leadership at brokerage and board association levels.
The Women’s Leadership Initiative (WLI) Toronto chapter is committed to increasing the number of women in leadership roles in the real estate industry. WLI was established more than a decade ago as a global program and has 40+ chapters in eight countries. This organization has an important role to play in furthering women in leadership positions.
Earlier this year, the REET Institute, with support from the Alberta Real Estate Foundation, launched a program for Black, Indigenous and People of Colour in the Edmonton area to further promote diversity in commercial real estate. The program is designed to educate, train and equip high school students with financial literacy through commercial real estate. The goal is to encourage these students to work towards a career in the industry.
Latest diversity numbers
The real estate industry compares favourably to other TSX-listed firms with regard to women director diversity levels. Data compiled for Osler’s 2022 Diversity Disclosure Practices report shows that 28% of directors at real estate companies in 2022 were women (up from 25% in 2021), compared to 25% for TSX-listed companies as a whole. On a per-board basis, the number of women directors was 2.10 for the industry compared to 2.05 for TSX-listed companies overall.
Breakdown of number and percentages of women directors in 2022
Breakdown of number and percentages of women executive officers in 2022
Trends since 2015
A 2021 Diversity and Inclusion study by the U.S. real estate investment management industry association NAREIM and executive recruitment firm Ferguson Partners found that women and minority professionals each comprise 15% of executive management positions in real estate investment management. Since a previous NAREIM survey in 2017, women have increased their representation in C-suite jobs by 25%, while minorities saw their executive representation grow by 50%.
The survey also shows that 96% of respondents have a diversity, equity and inclusion (DEI) program or initiatives to improve DEI within their organizations, and 71% of participants said they have staff dedicated to DEI, either in relation to specific job roles or through employee committees. In 2017, just 37% of survey respondents said they had such programs in place.
Women executive officers in the real estate sector
For both women and visible minorities, progress has been impeded by barriers to entry. In an industry largely driven by relationships, those in the business tend to work within their circle. They also recruit within the same circle. Those on the outside are unaware of networking opportunities. Apart from the lack of a network, which hinders informal recruitment, women and visible minorities often face a shortage of mentorships and sponsorships within the corporate setting. These are the individuals who support, encourage and help navigate the unspoken rules of the industry, which are so crucial for making contacts. The Toronto chapter of the CREW Network is helping to address this by offering mentorship programs, pairing women with less than five years in the industry with more senior executives.
At the corporate level, barriers to diversity and inclusion include not knowing how to start a program. Some companies simply do not make diversity a priority and do not allocate resources towards development of initiatives. They do not recognize that diversity and inclusion requires a mindset change across shareholders, management and employees. Leadership is also needed to set the tone and to be available for support.
Best practices and sector leaders
Osler’s 2022 Diversity Disclosure Practices report identifies DREAM Unlimited Corp. as having at least 50% of women in director positions. Melcor Real Estate Investment Trust had exactly 50% women executive officer representation.
In the U.S., the Real Estate Executive Council, which is a trade association for commercial real estate professionals of colour, has launched a new Diversity Partners Program. This program partners with development companies, real estate groups and other trade associations to set clear and measurable goals for supporting vendor and supplier firms owned by people of colour. The council’s leadership has challenged its membership to set a goal of spending a percentage of their budget with minority owned firms and to consider increasing the amount they allocate to minority owned investment managers, developers, projects and communities. Their members must also establish accountability for the goals they set in these areas of diversity. The purpose of the program is to change the industry from within and to groom younger generations to consider real estate as a viable option.
BentallGreenOak has set a policy that two-thirds of future hires be women and minorities. In 2022, the company expanded its internship program to provide internships for professionals from underrepresented groups to create meaningful pathways to a career in real estate, and a global mentorship program to develop diverse talent pipelines and increase diverse representation among senior leadership.Their goal is to build an employee base that is reflective of society and their customer base.
In the past 18 months, two industry leaders have made appointments which show the importance they are placing on diversity and inclusion globally. In March of this year, JLL, a global real estate services firm specializing in commercial property and investment management, appointed a female executive leader to the new role of America head of diversity, equity and inclusion. This position has responsibility for driving and executing the global diversity and inclusion strategy for the Americas and for defining priority focus areas and measurable goals for the region. In June 2021, Blackstone, a global leader in real estate investing, appointed a head of diversity, equity and inclusion, with the mandate to achieve a more diverse and inclusive workplace both at Blackstone and its portfolio companies. Taking a global perspective on diversity and inclusion is something we can expect to see more of from industry leaders in the near future.
For real estate companies and their leaders, the benefits of diversity and inclusion can no longer be denied. It is just a matter now of ensuring that supporting programs and initiatives are firmly embedded in the industry’s culture.