Today, the majority of women in real estate work in residential real estate – buying and selling homes. So, when women reach out to me to ask whether they should embark on a career in commercial real estate (CRE), my answer is an unequivocal “yes”.
Commercial real estate is an investment in real estate that generates income or is otherwise intended for investment purposes; think office buildings, shopping centers, industrial warehouses, and apartment buildings. The roles that comprise the commercial real estate industry are varied and rewarding.
As a woman who already has a seat at the table, my role is to bring more diverse voices to the table.
Women in Real Estate: Challenges and Opportunities
Take a seat at the table.
Yes, you might need to bring your own chair.
Yes, it feels like a contrarian play. There are headwinds. In residential real estate, women represent 64% of the industry. The numbers are reversed for commercial real estate. A December 2019 MIPIM report notes that, “Commercial Real Estate (CRE) is a historically male-dominated industry which has been slower than other industries to improve on gender parity. In the United States, men make up 65% of the CRE workforce, and this discrepancy parallels other nations.”
It is true that commercial real estate does not have a positive track record of welcoming – much less being fair to – women in real estate. In a series of interviews by Bisnow, we hear directly from women who have experienced the good, the bad, and the ugly of commercial real estate. The experiences range from harassment to discrimination to a sustained gap in pay. The most recent research published by CREW Network found that, “Women continue to earn less than men. In 2020, the fixed salary gap between genders is 10.2% and the commission and bonus gap is a staggering 55.9%. For Black, Asian, and Hispanic/Latinx women, the gap is wider.”
The COVID-19 global pandemic has accelerated and exacerbated the disruption that the CRE industry has been experiencing over the last decade. The impact of technology paired with shifting consumer demographics has inexorably changed how and where we work (think coworking), how and where we shop (think online shopping), and how and where we travel (think sharing economy). This disruption has altered how investors view CRE as part of their diversified investment portfolios. At the macro level of investment transactions, this translates into a global CRE sales transaction volume decline of 29% year over year, with 2020 reaching the lowest level since 2013 as reported by Real Capital Analytics.
Yet, I will continue to encourage you to join the commercial real estate industry. “Why?” you ask.
There is opportunity. Now is the time.
In 2019, the commercial building sector, including both new and existing office, industrial, warehouse, and retail properties, represented 5% of the US GDP at $1.14 trillion and 9.2 million jobs. Given that women make up almost half of the workforce in the US and only 35% of the CRE workforce, there is outsized opportunity for women to participate. As the industry moves towards gender balance, there will be more women hired into meaningful roles.
The wide array of roles within the industry provides opportunity for women in real estate to contribute across many disciplines – architecture, engineering, banking, investments, construction, brokerage, law, accounting, technology, operations, etc. The industry offers roles that value many different skills, including creativity, science, and relationship building.
In its 2021 US Real Estate Market Outlook, CBRE projects a 4.5% rebound in the US GDP in 2021. Since commercial real estate’s recovery historically lags the broader economy’s recovery, CRE recovery will become more apparent throughout 2022.
Participation in the CRE industry’s recovery offers financial benefits, both through near-term compensation and long-term wealth accumulation opportunities. The long-term opportunities include the possibility of owning a percentage interest in a building or portfolio (direct investment), employee profit sharing benefits, and stock options of publicly traded firms. The CREW Network Benchmark report publishes market compensation data by roles within the industry.
Why We Need More Women in CRE
The industry needs you.
Desperately needs you.
Before the COVID-19 pandemic, the CRE industry had already been experiencing disruption across the different property types. Most of the industry responded to the disruption with reluctance, resistance, and nonchalance. Sticking your head in the sand is no longer an acceptable strategy. The industry needs talent with the ability to be agile, fail fast, and adapt rapidly. The advice from Deloitte for real estate owners: “Ultimately, the winners will be those that can adapt to the forces of change faster than the speed of change itself.” There is much work to be done, and your expertise will help chart the path to success for the CRE industry.
The COVID-19 pandemic significantly disrupted the US labor force with the loss of 22.5 million jobs in April 2020. While many of those jobs were recovered over the course of the summer, the labor participation rates for women did not recover at the same rate as men. Many people saw this disparity coming, and it was crystallized in the September 2020 report published by McKinsey & Company and LeanIn.org. The survey results in the report showed that “more than one in four women are contemplating what many would have considered unthinkable just six months ago: downshifting their careers or leaving the workforce completely.”
The economic recovery requires labor participation, and we need women in real estate to return to the paid workforce to power the economic recovery engine. Given that the real estate industry started at a low rate of female participants paired with many firms’ commitments to bringing a diverse set of perspectives to the table, the industry needs you even more.
Because real estate matters.
Real estate is where we live our lives – it is where we live, where we work, where we shop, where we eat, where we provide services to our communities, where we meet, where we heal, where we educate, and where we learn.
When we invest in a commercial real estate building, we are investing in the community where that building is located, and we are making an investment in our future. Getting it right matters – it matters to the members of the community where it is located, it matters to the investors who rely on the results for their retirement benefits, and it matters to the people who occupy it.
The building will continue to be there long after the first round of “grand opening” banners are taken down. Over the decades, the community will look to it to continue to be a good citizen, occupants will look to it to serve their needs in a sustainable manner, and its investors will look to it to provide returns that support their needs.
Much of the industry acknowledges that they need to do better.
With the killing of George Floyd in summer 2020, the national conversation turned to social justice and equity. Many leaders in CRE acknowledged that the industry had played a part in perpetuating systemic racism and social inequities. During the last half of 2020, more leaders of CRE organizations committed to increase their focus on diversity, equity, and inclusion (DEI) across their organizations and their investment activity to provide value to their stakeholders, community, and employees.
The industry is also experiencing pressure to address its outsized contribution to climate change – the real estate industry is responsible for 39% of global carbon emissions. Increasing regulatory and customer pressures will lead more and more CRE owners to pursue environmentally sustainable practices, including net zero carbon strategies, as part of their socially responsible investment commitments.
Both internal and external forces are holding CRE organizations’ proverbial feet to the fire. Internally, employees are demanding that their company leaders communicate their plan and how they will measure and report their results. Externally, investors are holding companies accountable through a preference for firms with robust Environmental, Social, and Governance (ESG) policies. Customers, as usual, are choosing with their feet and their wallets.
So, after considering the pros and cons of working in the commercial real estate industry, the next question you ask is, “How can I set myself up for success?”
Women in Real Estate: How to Succeed
Choose wisely.
Forewarned is forearmed. In this article, I provided information on some of the challenges that you might face in the industry along with information about why it is still worth diving into. You made it this far in the article, so follow your curiosity and learn more.
Seek out the firms that not only talk the talk but walk the walk. Dig into their investment performance. Dig into their business plan. Dig into their commitments to diversity, equity, inclusion (DEI), and social justice.
Understand what their websites are communicating to you, to their customers, and to their investors. Determine if their messaging matches your values and priorities. Reach out to people to learn about the real estate firms they admire. Do your due diligence and become informed about the firm that you are considering.
Build a network.
Find a sponsor.
Surround yourself with people who support your success. This applies to life in general along with your career. Create a network of experts, colleagues, peers, friends, mentors, and sponsors who can provide you and to whom you can provide information, guidance, and feedback. Think of your network as a living, breathing ecosystem that requires engagement and nurturing to maintain and grow.
For your real estate network, evaluate the networks in which you already participate and determine where you need to expand or modify. Join an industry association where you can learn from others in the industry, participate in a committee or team, and build leadership skills. More on this below.
Through your network and contribution to the industry, cultivate both mentor and sponsor relationships. The difference between mentors and sponsors is advocacy and power to influence. A mentor is defined as, “A person more experienced with wisdom to share and desire to help you succeed.” A sponsor is defined as, “A leader who will take charge to advocate for you for career advancement opportunities.” Both mentors and sponsors are crucial to your success.
Lean in and dig in.
Invest in yourself through your participation in associations and organizations where you can learn, build connections, and cultivate opportunities. Consider joining CREW Network, whose mission is to “transform the commercial real estate industry by advancing women globally.” Another organization to consider is the Urban Land Institute (ULI), whose mission is to “shape the future of the built environment for transformative impact in communities worldwide.” Both organizations are committed to supporting your success in the industry. Additional organizations to consider include NAIOP, the Institute of Real Estate Management (IREM), African American Real Estate Professionals (AAREP), the Society of Industrial and Office Realtors (SIOR), and the Building Owners and Managers Association (BOMA). As an added incentive, many of these associations offer membership opportunities tailored for students and young professionals.
Invest in yourself through your education. Continual learning is how we find a better way, and it demonstrates leadership and engagement. Given the myriad of fields and roles in the CRE industry, there are many options for courses, certifications, designations, and degrees. ULI Learning has a broad offering of introductory and in-depth courses on many real estate topics. Explore the content available through free online learning platforms, such as Coursera. Additional certifications and designations to consider include CCIM, CPM, and CFA.
Ask your network which industry associations and certifications they value and why. Try out a few of the associations and see how they work and how they feel. Research the certifications and designations of the people that you admire in the industry.
Advocate for yourself.
Raise your hand.
The CRE firms that recognize the opportunity of the market dislocation are already making changes that include revamping “job roles, recruiting strategy, talent systems and processes, and culture to attract and retain a multigenerational workforce.” Seize this opportunity, raise your hand when you see a role where you can add value, communicate your goals and plans, and show how they support the objectives of the organization.
When you have a seat at the table, own your space, own your voice. You are at the table because your life experience is valuable, your knowledge is necessary, and your talent is crucial to the success of the organization. When you have an idea, a question, or a comment, share it with the team. They need to hear from you to achieve the firm’s goals.
Be the difference.
Yes, that statement is a lot of pressure. You can handle it. You have been doing it all your life.
The commercial real estate industry is woven into the fabric of our society. We need to find a better way to succeed and thrive into the next century. Your participation will make the difference.
Plant your feet in the present moment and look around at what you see. Then look to the future as you want it to be. You can start today to build that future. Take your seat at the table, make a difference today, and be the example for the next generation. And bring a chair for the next woman to join you.
In real estate investing, there’s no B2B, or B2C. It’s all H2H.