Improving Gender Equality in Commercial Real Estate (Part II)
In Part I of this series, we looked at men in social work. Here in Part II, we address the subject of women in commercial real estate.
Women in Commercial Real Estate
As an introduction, it’s important to make a distinction between different positions, as not all real estate careers are the same. According to a study by the National Association of Realtors (NAR), 65% of Realtors (sales agents and brokers) are women. However, only 37% of people in commercial real estate (CRE) positions are women.
Commercial real estate includes positions involving financial analysis, project management, construction, property management, equity and debt financing, engineering, appraisals, etc. These positions focus on commercial projects such as apartment complexes, office buildings, industrial warehouses, hotels, and retail centers. By comparison, Realtors are generally real estate sales agents who help people to buy and sell residential homes that people live in.
Why are There Fewer Women in CRE?
Some of the traditional explanations for the gender gap include the stereotype that women are more natural caregivers. With this in mind, it has been argued that taking a person or a family from house to house and helping them determine which one would make the best home, is more in line with a traditional woman’s personality. On the other hand, commercial real estate has more of a corporate feel that can include a more aggressive and competitive work environment, something that women may generally be less comfortable with.
Socialization and how we grow up can also play a role. For example, finance and risk analysis which play a key role in commercial real estate, involve quantitative analysis and mathematics. These are areas of study that young girls have been traditionally steered away from pursuing. Careers that employ STEM (science, technology, engineering, and math) skillsets will naturally have fewer women if young girls are actively being discouraged from pursuing them.
A third common explanation is the continued reality of sexism and double standards. Once a field becomes male dominated, as CRE has, it can be difficult for women to break into the field without feeling like an outsider. Some men may resent women entering what they feel is “their” workplace and thus disrespect the female coworkers they encounter. It’s worth pointing out that sexism need not be as blatant as a crude or sexually themed remark. It can also refer to overlooking and undervaluing women, or holding on to outdated norms.
As an example, many women have unfortunately had the experience of being forced to choose between dressing professionally and being labeled as less feminine, or dressing in a more traditionally feminine manner and being labeled unprofessional, assumed to be less capable, and/or possibly objectified.
Still another reason may have to do with nepotism and traditional gender roles. While it’s a generalization, older men are more likely to hold onto traditional gender role assumptions than younger men. Older men are more likely to be more advanced in their careers, and when they look to train the next generation, may be more inclined to hire or work with a nephew than a niece, or a son rather than a daughter. Thus, it could take another generation before we see improved gender equality in CRE.
A Less Commonly Given Reason
The glass ceiling is the idea that there is a barrier to career advancement for certain populations, particularly women.
A study by McKinsey and Company found that for every 100 men who receive a promotion, only 72 women are promoted. Their study concluded however that it’s not the highest levels of an organization where the problem exists, but rather the middle, a concept they refer to as the broken rung.
According to their explanation, many women start off in a business career with high aspirations and hopes. But after a few years they see their male counterparts being promoted to middle management positions, while they remain behind in entry level roles. This leads women to become discouraged, disillusioned, and frustrated. In many cases, this leads them to begin seeking an alternative career path. These feelings and the decision to consider a new occupational direction are understandable for anyone whose career has prematurely peaked. Of course, the gender pay gap doesn’t help either.
The study goes on to explain that it’s only natural that if fewer women are promoted to middle management positions, that there will be a smaller pool of candidates from which to select upper level managers. Basically, if women aren’t given middle management roles, how can we expect them to be promoted to more senior and executive level positions?
One thing I’ve noticed being on campus again is that this broken rung is visible even in the educational arena. The ratio between women and men is much more equal at the undergraduate level than at the graduate level. Most people do not begin graduate school until they’ve been working for a few years. Perhaps many of these women have by then already experienced enough discouragement and disillusionment that instead of pursuing a higher degree in CRE, they’ve already begun to move into other career paths.
What Can We Do?
In order to attract more women into executive roles, we need to encourage and support women as they make their way into middle management positions. We need to support them from childhood, encouraging them to pursue STEM careers and take quantitative courses in school, if that’s something they have a genuine interest in. In other words, we shouldn’t pressure girls to take STEM courses just to get the numbers up, but when it’s something they express an interest in, we should support and encourage them.
We can offer support in the form of formal and informal mentorship, such as through organizations like CREW (Commercial Real Estate Women Network) that offer comradery and encouragement. We can also make a more conscious effort to attract qualified women both into real estate educational programs and jobs.
We also need to be aware of the obstacles that women in commercial real estate face. This involves helping women to see their traits and skills as assets rather than liabilities. For example, negotiations are common in the business world. Many people think of negotiations as being inherently conflictual, which can be off-putting. Though men may also dislike conflict, if a woman is naturally inclined towards collaboration, she can learn to use that tendency to her advantage. Studies have shown that the most effective negotiations are generally not when people take an aggressive all-or-nothing approach, but when they work together to find a mutually beneficial solution.
What Can Men Do?
When seeking to solve this issue of attracting more women to the business world and commercial real estate in particular, we can accomplish more if we look to men as part of the solution, and not simply the source of the problem.
Sometimes well-meaning men are at risk of making things worse. For instance, a man may go out of his way to make the women he works with feel welcome. But this can actually have the opposite effect. Men who approach women as disadvantaged, less capable, and inherently dependent can inadvertently come across as condescending.
Most women are not looking for a hero as much as an ally. One way to be an ally or advocate is to sponsor a woman. When you sponsor someone else, you join with them by using your own voice to lift up theirs. Sponsoring involves taking a risk and validating someone else. It’s a way of seconding someone else’s view or opinion, agreeing with them, and encouraging others in a group setting to take their comments seriously.
Imagine for instance, a brainstorming session where people are asked to out ideas for how to solve a company problem. We’ve all experienced a situation where someone who has more clout in a group, who has a higher social standing, or who is simply more outgoing makes a comment and everyone applauds them; while someone else mutters under their breath that they just said the same thing two seconds earlier.
While this can happen to men as well as women, sponsoring a woman by seconding her point, serves to add your own credibility to her idea. In doing so you give credit to the author of the idea, but use your own social standing to lift up a voice that may not otherwise get the attention it deserves.
As with any form of social change, we all carry a responsibility and it takes a communal effort, dedication, and commitment to make a genuine and lasting impact.
Interesting take, and I agree 100%. CRE is an interesting world in and of itself because there are so many niches and facets that you can get into and oftentimes it requires a "apprentice" type role to get in and learn the business. Ultimately you are not dealing with clients who are looking for a home to live in you are working with clients that are transacting in large deals with large risk, and most information/process etc are kept very close to the chest.
I find where residential real estate has welcomed for the most part technology, automations standardizations, the CRE world lags way behind and is very much still a "relationship" business and therefore really lends itself into being the "old boys club"
My point being its hard to break into the field regardless of gender, not to diminish the increased difficulty for woman, but it takes a very intentional tract to get in for anyone.
Michael K Gallagher, 13 days ago