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“Commercial real estate is perhaps the most compelling investment opportunity in the United States right now, it is a $5 trillion business where one percent is minority.” Quinton Primo III of Capri Capital Partners L.L.C. “ ~ from Black Enterprise
The real estate industry, from a development perspective, is singly the least diverse industry on the planet. You could also say one of the most vital. There are proportionally more minority accountants, doctors and lawyers than minority management-level commercial real estate professionals (less than 1% of 125,000 – source REAP).
I think part of that rests in the fact that it’s primarily controlled by a few white males. Literally, a small fraternity controls the majority of the world’s real estate. There is some historical significance to this as most property was held by white owners and has been passed down throughout generations. It largely remains that way today. One percent of real estate wealth is held by minorities. No wonder heavily populated urban areas suffer steeper declines compared to more diverse cities. Women are also significantly underrepresented in commercial real estate as well.
The essence of real estate development is identifying a need and filling it. Whenever I hear someone say, “This area needs a supermarket,” or “We really need a drug store,” I can only think to myself how many would-be developers exist who could benefit from mentoring. It’s a catch 22: you need minorities in development to mentor other minorities in development, but if the numbers of minorities aren’t increasing, the gap will only continue to widen. By 2030, it’s projected that America will have to build another 200 billion square feet of space to accommodate growth for an expected 70 million, and a great majority of that growth will be from non-whites.
As urban renewal becomes more pronounced, we’ll need a cross-section of real estate minds to address our ever-changing demographics. Chances are your community – no matter the cultural makeup – was developed by someone who does not look like you or share the same value systems you do; a need was identified and filled. Many communities are accustomed to being part of a charette. However, what communities are not used to is being apart of the implementation process once suggestions are made and adopted by a given city.
I think we should inspire, educate and empower community level leaders with the resources they need to redevelop their own communities. The response was quite astounding on Ava Bromberg’s new model that seeks to leverage strip malls into vehicles of economic activity. For example, Abyssinian Development Corporation (ADC) is the largest community development organization of its kind and demonstrates the power of community engagement – they have a portfolio of over $350,000,000.
Detour: Level Playing Field
The need is much greater than many realize but the conversation has largely been non-existent because so few are affected. I’ve chaired several industry committees and have witnessed, personally, the underrepresentation of women and minorities within the industry. On any given day, you’ll find a number of minorities who practice residential real estate. They often lack the knowledge on how to structure projects and thus pass them on to someone who has the knowledge capital to deliver a project. This isn’t an indictment, we need skilled professionals in real estate but the lack of information sharing has reached critical mass. Just as social media has allowed communities to be formed online, I believe communities can be rebuilt offline utilizing a similar platform – create the conversations, share solutions and implement the best ideas.
I’m pulling back the curtain to say the secret is out – anyone can develop real estate, it’s not an elite club meant for a few. The question then becomes a matter of how to connect the many dots. I’ve met with some prominent minority developers with businesses that range from a few million to a few billion dollars, but none of them offered solutions to lift up the next generation of real estate leadership. Social media has allowed for the brokering of ideas a world over; Aribra seeks to accomplish a similar feat in the built space. Is this about economic benefit? Absolutely not. It’s about taking our communities back. A lot of people bemoan capitalist organizations that effectively strip other countries of their natural resources. This could happen for any number of reasons; some are political, some are not. Whatever the reason, there is no need for our communities to be exploited by developers, most who don’t live there and are solely looking for economic returns instead of leveraging already existing assets.
The following are organizations that have sought to address the issue of diversity in commercial real estate. I’ve found them to have successful inclusion programs.
a. CCIM’s Cultural Diversity Education Program (CDEP)
b. Project REAP [Real Estate Associate Program]
c. Commercial Real Estate Women (CREW)
It’s our time.