CRE Must Do More to Ensure Diversity, Equity and Inclusion: Now Is the Time to Listen, Learn – and Act

The below op-ed was originally published in Banker and Tradesman on June 28, 2020

Now is a pivotal moment in history where society’s attention is finally focused on what we have collectively ignored for far too long – hundreds of years of brutality, racism and inequity throughout the United States of America. While COVID-19 has pushed us into unusual and unprecedented times, the systemic issues being protested were with us long before the pandemic.  

As an industry, commercial real estate is predominantly white and male. While steps have been made in recent years to begin to address this, more must be done. The collective voice of our industry is strong – and must be used to amplify voices that are not heard. It is incumbent upon industry leaders to bring attention to these injustices and to commit to real change for this critical sector of the economy.  

NAIOP Massachusetts, The Commercial Real Estate Development Association, applauds the peaceful protests that have occurred around the country and here in the commonwealth. Diversity, equity and inclusion are a priority for our organization and our leadership, but we recognize that we can and will do more to advance change across the industry.  

Small incremental change is no longer enough. Real change will happen when all companies – and senior leadership – commit to creating a more diverse and inclusive industry. It will not happen overnight, but the industry must be unified in making diversity, equity and inclusion a priority. 

What Must Be Done 

NAIOP urges the professionals and companies in the commercial real estate industry to start with the following action steps. 

Listen and learn. Business leaders like to think they have all the answers. However, now is a time to listen, learn and acknowledge how deeply embedded racism is in the United States. This does not mean asking the Black, Indigenous and People of Color (BIPOC) in your company for their advice – seek out professionals who specialize in this space and commit to being an active part of any company dialogue. Internalize what you learn and address it in your professional and personal interactions. 

Engage leadership. Change must come from the top. While human resources professionals are an important piece of this work, hiring BIPOC is just one piece of the puzzle. In order for the industry to diversify itself from entry-level positions to the C-suite, and change the culture, company leadership must be at the table, advocating for BIPOC employee success and committing to long term change. 

Support MWBE businesses and the organizations that empower them. After too many years of hearing that there were no people of color in commercial real estate, Dave Madan created the Builders of Color Coalition (BCC). It convenes minority real estate professionals in Greater Boston’s building sector to leverage access to development projects. Its 500 members include developers, investors, architects, attorneys, bankers, contractors and brokers working across a wide range of firms, from family-owned enterprises to multinational companies. The Black Economic Council of Massachusetts, also known as BECMA, led by Segun Idowu works to advance the economic well-being of Black businesses, organizations that serve the Black community and Black residents of Massachusetts. These organizations are critical to the success of businesses of color and will help the commercial real estate industry to create more diverse teams.  

These are just two examples of organizations that are working to address serious inequities in companies across Massachusetts. Seek out organizations, community groups and change-makers who have been working in this space for years and invite them to the table as you begin these conversations.  

Hold Yourself Accountable 

Create a career pathway for diverse talent. Talent recruitment programs designed to introduce high school and college students of color to commercial real estate are essential. The Commercial Real Estate Success Training (CREST) Program is a comprehensive initiative to support commercial real estate companies in their commitment to attract underrepresented college students of color and women to the industry through summer internships. The program, now in its fourth year, has placed close to one hundred students in internships and led to career placements in the industry.  

With broader industry support, more students can be placed in these internships. NAIOP is encouraging its members to support CREST by hosting an intern or committing to a financial contribution that will allow the program to expand. The Real Estate Exchange (REEX) Summer Program, sponsored by REEC, is a unique 10-day, academic-intensive experience for high school students created to expose teens of color to top-tier universities and career opportunities in business, entrepreneurship and commercial real estate. NAIOP is proud to support REEX and CREST and we will continue to urge members to seek out programs that target equity and inclusion and implement them. 

Be accountable. You can’t manage what you don’t measure. Create diversity metrics, set hiring goals and update them regularly. While numbers are important, they do not matter if the culture is not inclusive and supportive. Make both a priority – and hold yourself accountable for their success. 

This is by no means a comprehensive list of action items for the industry. These are simply near-term steps that should be the minimum requirement for all commercial real estate firms. In the coming months, NAIOP will be working with a subcommittee of its board of directors and a coalition of real estate trade groups to identify and advance further opportunities for change. We do not have all the answers, but we are committed to learning, listening and acting to create a more diverse, equitable and inclusive industry. 

Tamara Small is CEO and Reesa Fischer is executive director of NAIOP Massachusetts – The Commercial Real Estate Development Association. 

Massachusetts Community Colleges Need to be Up to the Challenge

The Massachusetts Community College system is getting some well-deserved attention in Governor Patrick’s State of the Commonwealth address, the recent Boston Foundation report, and various news articles and editorials.

Primary concerns voiced by many are their underperformance and the current mismatch between the skills taught through our state higher education system in general (and community colleges in particular), and the middle-skilled jobs currently unfilled or expected to be available in the coming years.

One clear indicator of the problem is that graduation rates at the state’s community colleges are very low, especially as compared to other systems across the country.

The Boston Globe editorializes that the community college system needs to focus on being a “springboard to a productive career,” preparing students for gainful employment, especially “in an economy where competition for jobs is fierce.”

“Everyone without a job in Massachusetts today is likely to need more education, more training, directly relevant to employment opportunities, before they find one.” With over 240,000 people unemployed in the Commonwealth, community colleges have a very large pool of potential students to help.

The question becomes: what needs to be done to bring the existing system of community colleges in better alignment with the needs of employers in today’s economy?

To start the process, in 2010 Governor Deval Patrick established the “Vision Project” initiative using data to align higher education with workforce needs, with the objectives of:

  • Improving college readiness;
  • Improving student completion rates;
  • Aligning degrees with workforce needs;
  • Improving student learning; and
  • Decreasing gaps between different groups of students

The Boston Foundation study (The Case for Community Colleges: Aligning Higher Education and Workforce Needs in Massachusetts) developed the following recommendations as a strategic blueprint for “building a system that effectively leverages the capacity of community colleges to be leaders in meeting the workforce needs of Massachusetts”:

  • Clarify the mission of community colleges, with a priority on preparing students to meet critical labor market needs.
  • Strengthen overall community college system governance and accountability.
  • Adopt performance metrics.
  • Better prepare students for community college-level work and graduation.
  • Stabilize community college funding.
  • Form a Community College Coalition.

Now is the time to focus on this critical component of the state’s economic development strategy, by boldly working to reform and strengthen the state’s community college system. We need to make it more accountable and performance driven as a strategic path for workforce development.

In a global economy, education will be the prime differential determining the winners and losers. We can and will rise to the challenges of tomorrow, if we make the right choices today.

A Giant Leap in Online Teaching

At the end of this past year, I had the pleasure of attending the Pioneer Institute’s Lovett C. Peters Lecture in Public Policy honoring Sal Khan, Founder of Khan Academy. The Khan Academy is a free, online education platform that has produced over 2,700 popular instructional videos, viewed 90 million times by students all over the world.

Listening to Sal Khan speak is inspirational.  Here is someone born and raised in New Orleans, who earned three degrees from the MIT, an MBA from Harvard, and who then went to work as a hedge fund analyst.  For family members and friends, Khan began tutoring using Yahoo!’s Doodle notepad.  Once these lessons hit YouTube, their popularity soared and Khan quit finance and established the Khan Academy.

It is a not-for-profit educational organization with the mission of “providing a high quality education to anyone, anywhere.”  I realize that this sounds a bit over-the-top, but it is very real and the Academy has developed a free on-line library with micro lectures via video tutorials teaching Mathematics, History, Healthcare & Medicine, Finance, Physics, Chemistry, Biology, Astronomy, Economics, Cosmology and Computer Science. The Khan Academy also provides a web-based exercise system that generates problems for students based on skill level and performance.

This project has attracted funding from the major names in technology and venture capital with donations from the Bill & Melinda Gates Foundation, Google, and John Doerr.  Recent investments will allow the translation of this library into the world’s most widely spoken languages.

An exciting offshoot is Khan’s involvement with existing public schools. Khan wants to overhaul the traditional classroom by using technology to provide for basic teaching, allowing the teacher to focus on the individual students’ struggles. The tutorials allow the students to stay with a lesson until it is mastered, something that cannot be easily accomplished through an hour classroom lecture.

Have your kids “test drive” these video tutorials and see what happens.  However, don’t miss the opportunity to experience for yourself the magic of these new-age, conversational tutorials with step-by-step doodles and diagrams using an electronic blackboard.

Economic Development Strategies for Patrick’s Second Term

Governor Deval Patrick

Governor Deval Patrick

Kudos to Governor Patrick for his focus on jobs and economic development for his second term. Travelling within the Commonwealth, across the country, and globally to attract economic development to the state can be an effective way to market the benefits of one of the top concentrations of skilled talent in the world.

In addition, opportunities for improving the Commonwealth’s economic environment exist here at home. Recently, John Schneider wrote in MassINC’s “INCSPOT blog” about three suggestions for the Administration:

  1. Conduct a top to bottom review of regulations that affect the state’s business environment.
  2. Make higher education reform a cornerstone of your second term.
  3. Get a handle on rising costs, especially health care, energy, and local government.

I completely agree with these ideas, especially regarding the cost of doing business in the Commonwealth. Many of us know about the direct costs: taxes, fees, health care and unemployment insurance. However, the cost in both time and money that arise from the multiple layers of regulations for existing businesses are an enormous burden and make us less competitive for new growth.

We should encourage our political leaders to get out of the office and aggressively market Massachusetts, but at the same time, we need to do a top-to-bottom assessment of the rules we impose on business. The better we do on the latter, the more success we will have attracting businesses to Massachusetts.

Gerald Hines’ Five Principles of Success

Gerald Hines

At MIT’s Center for Real Estate’s 25th anniversary graduation weekend, Gerald D. Hines gave the keynote address sharing his five principles of success. (Gerald is founder and CEO of Houston-based Hines, one of the largest and most respected real estate investment, development and management firms in the world.)

For anyone involved in development or looking to understand what it takes to be a successful, world class developer, read on:

  1. Create Quality Architecture. Hines’ love affair with great architecture is the stuff of legend. Long ago he made a commitment to collaborate with great architects — prominent architects such as I. M. Pei, Philip Johnson, Cesar Pelli, Frank Gehry, and Robert A. M. Stern have all worked with Hines. He urged the audience to build “something that endures.” 
  2. Commit to Sustainability. In the Hines lexicon, sustainability means two things. First, it refers to the durability of the buildings. Second, sustainability reflects the flexibility built into the design and construction of buildings. Hines is a leader in the EPA’s Energy Star program.
  3. Opportunities Exist in Acquiring Buildings – But Make Sure You Can Add Value. “You have to know when the cycle is at the top,” he said. “When you can borrow all the equity, it’s time to sell.”
  4. Mixed Use Developments Promote Better Communities and Also Lower Risk. Hines showcases prominent developments that exemplify the advantages of mixed use, all of which incorporate a range of uses, including offices, retail, hotels and condominiums.
  5. Human Talents Are Hidden Assets. Hines’ management structure is decidedly lean. Below a handful of very senior executives, other company leaders are compensated through 50 percent equity in the projects they are working on, not in the company as a whole. This arrangement reduces company risk while empowering the leaders and inspiring them to do their best work. 

To view Gerald Hines entire talk, please click here.
To learn more about the MIT Center for Real Estate, click here.
To learn more about Gerald Hines and his firm, click here.

City to City: Universities & the Innovation Economy

I’m in Tel Aviv, Israel after several days in Haifa as our “City to City” team completes its investigation of this country’s experience with start ups and  innovation.

Israel leads the world in percent of GDP spending on civilian R&D and in the number of engineers, scientists, & PhDs per capita. It also has more companies listed on NASDAQ than any country other than the US.

Technion, Israel's University of Technology

The universities play a critical role and one we should emulate. The first is obvious – they emphasize science and math in K-12 and produce more engineers and scientists! I am a big fan of liberal arts education, but in this digital world, the new industries require more PhDs in these areas.

Second, their universities drive innovation and technology transfer to the private sector. We met with the president of Technion (Israel’s MIT), the president of Haifa University, and local entrepreneurs. The schools encourage the creation of start ups, and have structured a support system that is coordinated with a national initiative that reviews and funds new ideas.

We have more schools per capita than any other state. We need to follow Israel’s lead and ensure these types of partnerships exist at many other schools besides just MIT. Connecting our colleges and universities with an economic development strategy will secure our position as an innovative leader now and in the future.