In a word, diversity in the commercial real estate industry is dismal. A 2017 study found that white men held more than 75% of senior executive jobs, with 14% held by white women. Blacks had just 2% of these top jobs.
To contribute to the long-overdue diversification of the commercial real estate workforce, the Leonard Wood Center for Real Estate Studies at UNC Kenan-Flagler created the UNC Real Estate Diversity Initiative (REDI) Program
The REDI Program is raising awareness and providing training, internships and mentorship to undergraduate students at UNC-Chapel Hill. It welcomes students from across campus – it’s not just for business students – and is designed for sophomores to build awareness early in their time at Carolina.
Part of the problem is that the career path can seem opaque from the outside, says Courtney Porter, Wood Center associate director and leader of the diversity initiative. “People are unaware of the opportunities. It’s been an old boys’ club for a long time.”
The long hours can be a barrier for women with children, she says. “Not only are you expected to work standard office hours, but you are expected to participate in after-hour social events to keep your network alive.”
The dearth of diversity comes at a great cost to the commercial real estate industry, as with any sector. Research from McKinsey shows that companies with more diverse management teams have greater financial returns.
“Not having a diversity of thought can leave people at a disadvantage when it comes to growth and creativity,” says Porter. “Diversity helps companies relate to and meet the needs of a diversified customer base. This could be the industry’s Achilles’ heel.”
Little has been done to improve the situation over the past decade, partly because the cyclical industry has been riding high on the tailcoat of a long economic cycle. “There has been little incentive to change,” Porter says.
But COVID-19 pandemic hit the commercial real estate sector hard as offices and malls closed through lockdown. Renters in apartment blocks also face financial challenges during a sharp recession.
Companies will need to come up with creative solutions to weather the crisis and diversity can be an asset, with research showing diverse leadership teams generate greater revenues from innovation.
To boost the badly needed talent pipeline, UNC Kenan-Flagler launched the REDI Program in 2019. It provides a comprehensive curriculum covering every function in real estate. It was designed with employers, involves MBA students, some of whom run UNC Kenan-Flagler’s real estate funds, and Wood Center staff, who deliver content similar to what they provide for full-time MBA students.
Crucially, the program includes an eight to 10-week internship with partner companies so students gain real-world work experience. They also are mentored by alumni.
Annabella Borgese (BSBA ’21) qualified because her mother is a first-generation immigrant from Venezuela. “The REDI Program opened up many opportunities for me, especially through the relationships I formed,” she says.
Borgese interned with Beacon Partners, a commercial real estate development firm, in Charlotte. “The people were so open and welcoming to me. My summer with Beacon solidified my passion for commercial real estate and granted me lasting personal and professional relationships,” she says.
She also interned with Barings after her junior year, a global asset management firm, and secured a full-time job offer that she plans to accept after graduation. “The REDI Program differentiated me from other candidates with more experience and connections,” she says.
Participants like Borgese become the REDI Program’s biggest advocates, sharing their experiences and feedback across UNC’s campus and creating a virtuous cycle of awareness building.
Applications have increased with 40 students competing for a place this year. The cohort is intentionally small so instructors can be attentive and provide tailored support to students.
Students are recruited through a review panel that searches for potential, not polish. “If a student worked at McDonald’s in high school and got promoted twice, that looks like potential to us even though they have no experience in real estate,” says Porter.
Participants get extensive career support, including personal coaching, mock interviews and resume reviews. Then, the program pairs students with partner companies.
“We act as the brokers and match both students and companies based on their preferences, which combats some of the bias in traditional recruitment, with companies preferring to interview candidates who are similar to their own employees,” says Porter. “We have had great success with students securing real state roles in acquisitions, asset management, brokerage, development and private equity.”
About 75% of the first cohort accepted full-time job offers in the real estate sector. So far this year, 50% accepted offers in a challenging job market, with another 25% in the recruitment process.
Georgia Burkard (BSBA ’22) joined the REDI Program to boost her employment prospects. “As a sophomore, no less a woman interested in commercial real estate, finding an internship is very difficult, so the REDI Program was the perfect opportunity to help me make that next step,” she says.
And the program ended up being so much more than just an internship.
“In addition to a phenomenal experience interning with JLL, I received introductory coursework in real estate, mentorship, professional development and course credit,” says Burkard. “The program provided so many dimensions of support that positively transformed and accelerated my career.”
She received offers to intern with Goldman Sachs in Dallas and at Wells Fargo in Washington, D.C. for summer 2021. She accepted Goldman’s offer to be a merchant banking summer analyst.
“I owe many thanks to Courtney Porter and Courtney Melvin, the undergraduate program coordinator, as well as the rest of the Wood Center for their endless support during recruiting and ongoing professional development,” says Burkard.
She says the Tar Heel alumni network is an invaluable resource. “I will be joining two Tar Heels working at Goldman who were extremely generous with their time, hopping on countless calls to help me to understand the role and prepare for interviews.”
Slowly but surely, the REDI Program is making a positive impact on the commercial real estate industry.