Corporate America has long had a gender inequality problem at the top, with males often dominating leadership and ownership positions across many industries. One of them is commercial real estate (CRE), where females have been underrepresented for many years, say the experts. But ample opportunities exist for women in commercial real estate who adopt the right approaches and recommended practices. To ensure better outcomes, it’s important to understand:
- Why women in commercial real estate have found it challenging to invest and work
- Other barriers to clear
- How women are making their mark today in commercial real estate
- What women need to know about CRE that can help them succeed
- Suggested strategies for success
- What to consider carefully before getting involved in CRE
Women don’t have to accept the status quo or preconceived notions about limitations or roles related to CRE. With the right knowledge, resolve, resources, and networking, anyone -- regardless of gender -- can get ahead in CRE and have the ability to prosper.
Why women in commercial real estate have found it challenging to invest and work
It’s no secret: Women have encountered difficulty making inroads in this industry, for multiple reasons.
"If you ask a little girl what she wants to be when she grows up, she probably won’t say 'a real estate investor.' This is because many girls are told fairy tales where the goal is to meet Prince Charming, who takes care of financial decisions when they live happily ever after," explains Suzanne Hollander, a Florida International University real estate faculty, Miami-based property attorney, and recipient of the 2018 Global Impact Award for Career Advancement for Women bestowed by the Commercial Real Estate Women (CREW) Network. "It’s rare anyone plants the seeds in the minds of a young girl to be the hero of her own fairy tale and become financially independent by investing or working in commercial real estate. The modern Prince Charming helps open the door, includes the woman at the table, and includes her in financial decisions, making them both hero and heroine."
Tamar Hermes, a CRE investor and founder of Wealth Warrior Woman in Los Angeles, agrees.
"Women are often conditioned to play it safe and stand in the background for protection, which doesn’t leave much room for us at the bargaining table," says Hermes. "We’ve not been conditioned to think big and command much ownership of property, so it’s intimidating to get started."
Other barriers to clear
Ask Mollie Fadule, partner with Seattle-based real estate private equity company Cephas Partners, who also serves on board of directors for CREW Network, and she’ll tell you that the CRE hill is a steep climb for many females.
"The sector has lagged others in moving toward gender parity for a variety of reasons," says Fadule, who notes that, per a CREW Network study, women in commercial real estate are paid $0.77 for every $1 earned by males in their same position; if these same metrics continue, women won’t reach pay equality until 2100. "Historically, more men than women have graduated with degrees in real estate, most of the real estate brokerage world is on a commission-based pay structure, and many women in this field encounter lack of sponsorship and mentorship."
Fadule adds that, while women now command more than 25% of board seats at S&P 500 companies, merely 5% of CEOs at S&P 500 businesses are female and less than 21% of officers and executives at S&P 500 companies in the real estate sector are women. Indeed, becoming a president, senior vice president, vice president, managing director, or other person in a leadership role can be difficult for females. And gender diversity can be tough to find in the CRE industry.
Marina Vaamonde, a CRE investor and founder of Houston-headquartered PropertyCashin.com, a platform that connects sellers and investors, points to other factors often standing in women’s way.
"There’s a lack of exposure and knowledge females have been able to acquire when it comes to structuring multifaceted deals, assembling atypical financial transactions, and having a solid industry network they can leverage to achieve success," Vaamonde explains.
How women are making their mark today in commercial real estate
Yet women are starting to see encouraging signs of progress. Consider that 50.4% of the 119 new directors added to real estate investment trust boards a year ago are women, based on data from Ferguson Partners.
“Also, 52% of the newly elected directors on REIT boards were women during the 2018 proxy period," says Fadule. "That marked the first time that more females made up the majority of new board members."
Still, she adds, "men account for eight of every 10 REIT directors, and nearly 10% of REITs have no female directors."
When women are given more seats at the table, research shows that good things happen: Companies that are in the top 25% of gender diversity are 15% more likely to have financial returns above their respective industry medians, according to a McKinsey & Company study.
Hollander says the #MeToo movement has elevated the issue of gender equality in several areas, including CRE.
"Women today feel more empowered to enter into business areas traditionally known as male bastions. And businesses today are making it a core value to promote women to visible senior leadership positions and appoint them to corporate boards. People in senior leadership roles and on corporate boards are, for example, often invited to join a commercial real estate syndication deal," says Hollander.
Clint Coons, a Tacoma, Washington-based attorney, founder of Anderson Business Advisors, and author of Asset Protection for Real Estate Investors, says at least 50% of the attendees he sees at real estate conferences are women.
“Some attend looking to get started, build a network, or build upon their existing success. Many work in teams with their spouse or business partner," he says.
Fortunately, perceptions about women being weak in business and successful as commercial real estate professionals are changing, believes Laura Frenkel, a CRE broker in Boulder, Colorado. "And with more women-owned business in general, that is making it easier for women to break into the scene."
What women need to know about CRE that can help them succeed
Coons says a confident and determined attitude will help women excel in CRE, whether they aspire to be female executives or otherwise.
"If you view yourself as a successful person who is experienced and capable, people will see this. But if you approach deals without self-confidence and don’t see yourself as a player, then nine times out of 10 that’s how you’ll be perceived," he notes.
Know what kind of a business you’re getting into, too.
"It’s important to understand the risks and opportunities. As an investor in any industry, it’s imperative to constantly be educating yourself and be an avid learner," says Fadule. "It’s also crucial to have the willingness to take appropriate risk."
Realizing that CRE investing can create more financial freedom and flexibility in your life is also essential.
"The reality of needing to work for a living takes a lot of time and energy and keeps women in a cycle of needing a 9 to 5 job, where they remain dependent on an employer. But investing in commercial real estate can allow you to create a passive stream of income that you may be able to live off of once your investments reach a certain level," Hollander says.
The good news about investing in CRE? "There are no barriers to invest -- no specific education, credential, or gender is required," Hollander says. "Some women believe they aren’t smart enough, but this is a fallacy."
In fact, women typically surpass men in this field when it comes to the emotional intelligence required for socializing, partnering, and negotiating with people.
"Commercial real estate demands that many people work together in a business relationship, and women excel at relationships," says Hermes.
Suggested strategies for success
For best results, try these tips suggested by the experts:
- Boost your knowledge. “Take courses in real estate, learn about issues like zoning, financing, and landlord-tenant law, read books and market updates, and talk to experts. Ask them questions so you can learn the market from all points of view," Hollander recommends.
- Locate a mentor. "Find a real estate investment association or meetups on commercial investing and seek out the most experienced person in the room," Coons says.
- Get your financial house in order. "Meet with your banker and build your credit to qualify for the lowest interest rates and down payments possible," says Hollander.
- Form a solid investment strategy that caters to your financial resources, know-how, and tolerance for risk. "Be prepared by doing your homework and creating a financial plan to move forward into the business confidently," Hermes suggests.
- Grow your network. "Start going to meetups and networking events with investors," says Hermes. Also, "develop a network of experienced investors who would be willing to partner with you on your deals," says Coons, who recommends having one or more partners on your first few deals to reduce initial risks.
- Create a trusted team. "Build relationships with an attorney, accountant, lender, and broker who share your financial goals and who you can call to talk about your deals," Hollander recommends.
- Start investing. "Don’t sit on the sideline; purchase property," says Hollander. "You can start small," but it’s important to get your feet wet and build your portfolio and experience.
- Check references for contractors, developers, and vendors carefully. "Interview many professionals, and get prices and processes before committing to hiring anyone," Hollander advises.
What to consider carefully before getting involved in CRE
More determined than ever to blaze a trail in CRE? Remember that real estate is not a liquid investment.
"The sector is subject to cycles that require investors to have the conviction to take a long-term view and use conservative leverage levels to weather the cycles," says Fadule.
Also, don’t be afraid to fail.
"When you fail, take the opportunity to reflect and understand why and what could have been done better. Work harder at educating yourself and surrounding yourself with a diverse group of individuals who will challenge you to address problems from every angle," Fadule suggests.
Lastly, don’t give up, "even when it seems the odds are stacked against you," she adds. Strive for greater gender equity as you take aim at the glass ceiling.