In recent years, more women have been making serious strides in commercial real estate, and women-owned businesses are on the rise. According to a 2020 Commercial Real Estate Women (CREW) report, women made up just 36% of the industry, while women holding executive positions only amounted to 9%.
Additionally, a number of organizations in the commercial real estate (CRE) industry have been formed, such as CREW, to support women in the industry and promote diversity. As the industry becomes more inclusive and is embracing talented women, many, including me, have broken the barrier to achieving success in CRE private equity. It’s crucial for women to enter this field.
Female CEOs may be few and far between, making up less than 5% of CEOs, but history shows they’ve been able to generate big returns for investors. Of the 24 female CEOs in the S&P 500, 13 have led their companies’ stocks to outperform the index in terms of cumulative total returns during their tenures.
Some have managed to produce triple- and even quadruple-digit percentage gains. The biggest out performer of female-run S&P 500 companies is health-care-focused real estate investment trust Ventas, which has generated a cumulative total return of 2,559% since CEO Debra Cafaro took over in March 1999.
A study by the World Bank Group’s International Finance Corp. shows that greater gender equity gives investment teams in private equity firms a performance edge. “Gender-balanced funds realized excess net internal rate of return of 1.7 percentage points greater than male- or female-dominated funds,” according to the study. “Our research finds these benefits likely include enhanced investment decision making and deal sourcing.”
For me, the real estate industry sharpened my skills to enter the private equity industry.
The balance between having young kids and the need to succeed was a challenge. The second challenge was my lack of experience and lack of mentorship. New York is one of the most competitive cities in the world, and I chose an industry that is male-dominated, ego-driven, and fast-paced but my determination to make it and the confidence I have in my abilities kept me going.
In retrospect, smooth seas don’t make skilled sailors, while the struggle was real those were the most important years of my career. The challenges I faced are similar challenges to anybody who’s breaking into the industry. New York City is not a place for the faint of heart, and I grew tough skin and learned how to roll with the punches as I was making it from one deal to the next.
I believe that worldwide — especially in New York City — commercial real estate is becoming a more diverse and inclusive industry. Standing proud outside NYC’s Wall Street Stock Exchange is the Fearless Girl. She ignited a global conversation about the power of women in leadership and inspired companies around the world to add women to their boards.
Many commercial real estate companies are putting diversity and inclusion initiatives at the top of their agenda. My real break came in 2017, when I met Joe Berko and his team at a real estate networking event. Joe had a leading commercial brokerage company in Midtown Manhattan specializing in structured finance and advisory that he morphed, after 20 years, into a private equity firm called Astor Realty Capital. I joined Astor as an originator helping form joint ventures with best-in-class developers and operators in all asset classes.
Many of the developers and large institutions that Astor works with see they are mentoring and partnering with more women. More CRE firms are accommodating to the work-life imbalances and making it more accommodating for women to attend to both domestic responsibilities and professional duties.
Particularly following the pandemic, which disrupted standard routines, like childcare and in-class education, this may be the opportunity for more women to contribute to helping shape and build environments that reflect the needs and values of women than ever before whilst meeting those responsibilities.
For any women attempting to enter the industry, value your skills and experience and refuse to give up despite the obstacles. The women who succeed in this field are the ones who know how to find the right opportunity, negotiate the best deals, and build strong relationships. Understand that failure is a part of doing business but do not afraid to take risks. These qualities allow you to create value in the commercial real estate industry and inspire other women to follow their lead.
There’s no doubt that what’s ahead of us is far much more promising than the ground we stand on currently. More women are being given a chance to lead, and they are proving that they are just as capable as men.
In addition, women are increasingly being seen as valuable members of commercial real estate teams, and they are playing a vital role in shaping the future of the industry. While there is still a long way to go, there is no doubt that women have a bright future in commercial real estate.
Marika Dzhindzhikhashvili is director and head of originations for Astor Realty Capital.
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