By Sandra Guy
Monday, January 9, 2006
The high-paying field of commercial real estate offers a culture and compensation structure that is often problematic for women. Female executives are changing that by mentoring more junior women and opening their own shops.
(WOMENSENEWS)--Gayle Farris is a believer in urban transformations and in a bigger role for women in making cities come alive.
Farris, president of Forest City Enterprises' Boston-based Science and Technology Group, led a $43 million purchase of a former pharmaceutical company campus in Skokie, Ill., and in July reopened it, in partnership with the village of Skokie, as a 28-acre science-and-technology corporate park that now offers 1 million square feet of laboratory and office space to corporate tenants.
Farris designed her early career so she could work as an independent real estate developer and spend time at home raising her two children. Now, in addition to her regular work responsibilities, she is mentoring women in her male-dominated field through her company's hiring, mentoring and promotion practices.
"It's no accident that we have lots of women in my division in top roles, as general counsel, chief accounting officer, senior construction person and as one of our developers," Farris said.
Networking groups that provide opportunities for mentorship for women in commercial real estate are springing up. The professional membership organization, Commercial Real Estate Women Network, based in Lawrence, Kan., operates 58 chapters nationwide. Other networking groups exist in architecture, construction and in the arenas of industrial and office properties.
The total commercial real estate market in the United States is estimated to be $3.5 trillion, according to the New York research firm Real Capital Analytics. The field is growing. The Chicago-based Real Estate Research Corp. estimates that the number of people employed as real-estate brokers, mortgage brokers, accountants and other support areas in commercial real estate increased by a quarter million in 2005.
Many institutional investors, such as pension funds, insurance companies and firms that professionally manage money, have been turning away from stocks and bonds and turning toward commercial real estate because of the stable returns the market has achieved over the past several years, according to Patty Bach, senior director at Fitch Ratings, a credit rating agency in New York.
Within this high-growth field, women's numbers are rising. A first comprehensive look at women in the industry published last September by Commercial Real Estate Women Network found that the percentage of female professionals in commercial real estate has grown to 36 percent from 32 percent in the past five years.
Though more women are entering commercial real estate, men earn more than women across the board at comparable levels of age and experience, as well as across specializations. The network's study, conducted by research firm Knowledge Systems and Research Inc., Syracuse, N.Y., was based on 1,834 online surveys and 250 follow-up telephone interviews last summer.
Comparing women and men with more than 20 years of experience in the industry, 44 percent of men surveyed held the title president, chief executive officer or chief financial officer, while 23 percent of women held those titles. Nearly 6 in 10 (58 percent) of the men reported yearly incomes of $150,000 or higher, but only 24 percent of women achieved those revenues.
"There is clearly more work to do to achieve parity between men and women in terms of compensation and career advancement and to increase the number of women in certain segments of the industry," said Ginger Bryant, the network's 2005 president.
The study also found that most brokers--the third-party agents in transactions--are compensated on a "commission-only" basis, and that women are twice as likely as men to reject such a payment arrangement. Since those on straight commission only get paid if a transaction is completed, the income is less certain than a salary or salary-plus-bonus pay structure. But commission-based positions typically offer a greater financial reward to the most successful.
The survey also revealed women who consider themselves "very satisfied" with work-life balance in mid-career reported that their satisfaction level increased as their experience levels increased. One apparent reason for this finding is that women are leveraging their experience to open their own companies and to do business their way.
Ruth Colp-Haber, president of her own firm, Wharton Properties Advisors Inc. in New York, is an example of that trend. Colp-Haber recalled being laughed at by men after she went out on her own 15 years ago and left a job as a mortgage trader on Wall Street.
"People were saying, 'You'll never make it,'" she told Women's eNews, adding that she ran up against a lot of skepticism that a woman could be successful in such a male-dominated field.
Jody Balaun is co-founder and principal at Arete Commercial Tenant Services, a Golden, Colo.-based real-estate company with six brokers that represents tenants looking for space. She is also happy that she decided to go out on her own.
Before she opened Arete with a male business partner two years ago, Balaun, who owns 51 percent of the company, worked at three large, national real-estate companies that she declined to identify. She said a highly competitive culture combined with some fraternity-house customs drove her away from the last one and convinced her that she should start her own company.
"I got really tired of situations where my male peers picked a nude bar as the next step after dinner to entertain a client," Balaun said. "It was very demeaning and divisive. But when the company president is doing it, how is he going to tell his underlings not to?"
Balaun complained to her former bosses about the practice and about policies that rewarded top brokers with trips to exotic locales where spouses were banned.
"At these big national firms, it was all about a new car, a mini-mansion and a third vacation home," Balaun said. "Where is the marriage? Where are the kids? Where is the balance? Where is the health?"
The backstabbing and cut-throat atmosphere turned her off, too.
"I saw that you couldn't get change," she said. "It was too slow of a wheel to turn."
She said she and her partner wanted to create their own culture and atmosphere.
Though Balaun is the only woman in her firm, she aims to hire women who agree with the company's philosophies.
Yet progress in promoting women in the commercial real-estate industry, especially in large firms, must come from the top, with a mandate from leaders, said Sylvia F. James, senior counsel specializing in diversity and employment law at Holland and Knight, a Washington, D.C., law firm that helped underwrite the Commercial Real Estate Women Network survey.
Janis Schiff, a partner at Holland and Knight, said the law firm supported the network's survey because it is committed to advancing women in the commercial real-estate industry and it wanted to establish a baseline on which to measure women's progress.
"It's very easy to attract women to certain male-dominated industries, but the real challenge is to keep them," she said.
Sandra Guy, a 22-year veteran journalist, is a business reporter at the Chicago Sun-Times. She has covered business, politics, education, technology and peace issues, and served as a former president of the Chicago chapter of the Association for Women Journalists.