Pandemic Lessons Learned—So Far

July 15, 2020 • John Salustri

Mark Dukes, BOMA Fellow, CCIM, RPA, says he’s ready now for virtually anything: “Storms? Okay. Blackouts? Bring it on. Pandemics? Sure. We have a procedure for that.” The trials of social distancing, widespread quarantine and business interruption that continue to define many of our lives caught most of us unprepared. But, as Dukes, who is vice president of Asset Management for Physicians Realty Trust, indicates, the COVID-19 pandemic has added yet another capability to property managers’ arsenal of contingency plans. Lessons on preparedness have come out of this extended trial, lessons that extend far beyond the obvious, low-hanging fruit of stocking up on facial masks and hand sanitizers.

At this point, a lot of ink has been spilled about implementing best practices for maintaining operations during and after the pandemic. But, those best practices—social distancing stickers on elevator floors, plexiglass dividers deployed at reception desks, limited access points in and out of buildings—are only half of the equation. The pandemic also has prompted building managers to beef up their emergency preparedness plans (see “The Emergency Preparedness Plan: Revisited,” sidebar ), re-evaluate their communication protocols and even redefine how they view work-life balance. In many cases, rather than unveiling better ways of working, the first seven months of this year also reaffirmed current policies and procedures. For those firms, COVID-19 became a corporate proof of concept.

“Our first coronavirus communication to our tenants was on January 27,” recalls Dukes. “We were way ahead of the curve, and we had to be because we’re in the business of healthcare.” In fact, he explains that cleaning supplies recommended by the U.S. Centers for Disease Control and Prevention (CDC) during the pandemic were already standard for use by Physicians Realty. And, BOMA International’s first guidance document on the topic was available in early February.

“So, changes to our cleaning protocols really revolved around stepped-up frequency,” he says. “But, we needed to let our tenants know early on that we were doing all that. We had to let them know we were wiping down frequently touched surfaces, such as elevator buttons, more often and that we disabled water fountains. We didn’t need to go through a ‘reopening phase’ in May; our buildings remained fully operational throughout the pandemic. So, our communications throughout have been focused on education to ensure that our patients, our hospital partners and all our tenants knew that we were doing all we could.”

FLEXIBILITY—WITH SAFEGUARDS

And to the extent possible, he did so with a maximum of flexibility to ensure tenant comfort. That included allowing them to use the parking lots, as requested, to take patients’ temperatures. “The majority of our buildings are multitenanted,” he notes. “If the primary tenant, which is usually a hospital, was willing to do so, we allowed them to screen patients in our lobbies or even in our parking lots before they got out of cars.”

Dukes says that procedure has been practiced in as much as one-third of the REIT’s buildings (which total 270 assets in 38 U.S. states). But, to allow for that flexibility, the trust had some precautionary measures of its own. “We needed an executed license agreement in those instances,” he explains. “Parking lots are an area that tenants technically weren’t leasing from us, and they needed to assume the liability.”

Money Talks

Consistent with the past three studies, the 2020 study finds a substantial compensation gap between women and men. Overall, the difference in total average earnings (salaries, bonuses and commission combined) across genders in 2020 is 34 percent—a nearly 11 percent increase from 2015.

The average fixed base salary in commercial real estate in 2020 is $112,290 (USD) for men and $100,802 for women. The 10.2 percent salary gap means that, on average, women make 90 cents for every dollar that men earn in fixed salaries. For Black, Asian and Hispanic/Latinx women, the salary gap is wider. Black women make 85 cents, Asian women make 86 cents and Hispanic/Latinx women make 80 cents for every dollar that men earn.

With regard to commissions and bonuses, the gender gap is much wider across all sectors. White women earn 51 percent less, Black women earn 71 percent less, Asian women earn 73 percent less and Hispanic/Latinx women earn 74 percent less than their male counterparts.

The average entry-level compensation in commercial real estate is $62,828 for women and $70,294 for men. This 9 percent gap is wider than in 2015 when entry-level compensation was nearly level. As in previous studies, the overall compensation gap (with bonuses and commissions) is the widest in the C-suite at 33 percent, a 3 percent increase from the 2015 study.

Some factors may be related to gender bias in hiring or disparities in commission-sharing arrangements. In other words, women may not be getting access to high-profile clients or the most profitable projects and deals.

Few Cracks in the Ceiling

Twenty-two percent of male respondents occupy the C-suite (a 5 percent increase from 2015) versus 9 percent of women, the same number from both the 2010 and 2015 studies. In senior vice president, managing director and partner-level positions, the percentage of women decreased in the past five years from 27 percent to 22 percent, while the percentage of women at the senior level remained the same at 33 percent. The study saw a greater proportion of women at the entry- and mid-levels (1 and 5 percent increases, respectively).

Forty-three percent of men and 32 percent of women aspire to reach the C-suite. Women’s career satisfaction and perceptions of success decreased across all industry specializations in 2020, while men’s perception of success has continued to increase since 2010. Similarly, the percentage of women who reported being very satisfied with the level of success achieved in their careers had remained relatively stable in the prior three studies, but has decreased in 2020.

When it comes to property management, in particular, men in the study represented 18 percent of the C-suite, while women represented only 7 percent. How do these numbers translate to property management as a whole?

Property Management Deep Dive

Property managers were well-represented in the 2020 study, with 11 percent of respondents indicating property management as their primary specialization. Fifteen percent of property managers identified as BIPOC. Industry experience was equal between men and women, with an average of 18 years.

Property management leads the way in several areas of the benchmark study. For example, women occupy 48 percent of property management positions, 11 percentage points higher than the 37 percent industry average. Twenty-one percent of property management professionals consider their workplaces to be diverse (25 percent or more are BIPOC), which is 5 percentage points higher than the 16 percent industry average. The average fixed base salary in property management is $109,536 (USD) for men and $105,545 for women—a 3.6 percent gap, which is well below the 10.2 percent industry average. But, women average $39,377 in commission and bonuses annually, while men report $74,981.

Action Leads to Change

To state the obvious, commercial real estate has historically been a predominately male profession. CREW Network’s various research initiatives exploring such issues as diversity, pay parity, unconscious bias and more show that the industry is finally starting to recognize the business benefits of diversity based on gender, race, ethnicity and sexual orientation. As more companies prioritize recruiting, retaining and advancing women, the needle will move, resulting in faster progress.

While the lack of progress for women in commercial real estate is disappointing, the extreme disparity in compensation for women of color in this industry is especially concerning. The industry has to do better, and it starts by recognizing that women of color face unique and often systemic barriers.

The research reinforces the fact that the industry must take intentional action to recruit, retain and advance diverse talent. Companies that prioritize diversity are outperforming others, including greater earnings, better governance, greater innovation and more opportunity. To increase DEI in commercial real estate, CREW Network is calling on industry leaders to understand the issues presented in this benchmark study and take action to resolve them as a business imperative, such as:

1. Greater DEI starts at the very top of your organization. Leaders and stakeholders must be invested and involved.
2. Be honest about unconscious bias in your hiring, promoting, assignment of challenging projects and inclusion in high-profile client relationship development. Acknowledge that BIPOC face a different set of barriers to advancement than women, especially white women. Hire an external consultant to recognize gaps, barriers and unconscious bias; take action to overcome it; and put accountability measures in place.
3. Conduct employee pay-equity tests regularly to identify disparities in compensation by gender and race. It is only through fact-based analysis of all forms of compensation that employers can truly know if, and where, pay gaps exist.
4. Intentionally recruit a diverse workforce. Partner with historically Black colleges and universities (HBCUs) and organizations, such as CREW Network, the Real Estate Executive Council (REEC) and the Asian Real Estate Association of America (AREAA), to seek out diverse talent.
5. Partner with industry associations, such as CREW Network and BOMA International, to help drive the conversation forward. Their initiatives help create a more diverse talent pipeline and support critical research. They also develop enriching industry education and provide leadership development and advancement opportunities for women, BIPOC and other historically underrepresented groups.

Gender parity and greater diversity, equity and inclusion are important investments for companies, employees and the future of our industry to remain a competitive and attractive career choice. Don’t be left behind.

ABOUT THE AUTHOR

Wendy Mann is CEO of CREW Network, a global business network and the leading producer of research on gender and diversity in the industry.