How Much Progress Has the CRE Industry Made in Sexual Discrimination?

sexual harassment part1

This is part one of NREI’s two-part study on the prevalence of sexual harassment and discrimination in the commercial real estate industry.

This past January, the commercial real estate industry was rocked by reports that one of its most prominent executives, Wynn Resorts Founder and CEO Steve Wynn, was guilty of sexual misconduct against multiple women working at his properties. At first, some in the industry tried to dismiss the accusations. Wynn’s friend, Colony Capital CEO Thomas Barrack, defended the embattled executive, calling him a “first-rate human being,” in an interview with Bloomberg. The casino mogul himself denied the accusations and blamed a negative public relations campaign by his ex-wife Elaine Wynn.

But as the weeks went on, more and more women came out with stories of Wynn coercing them into sexual acts and giving them “hush money.” In early February, Wynn resigned from his post with the company, with no severance pay allotted him by its board of directors, though he continued to maintain his innocence. In the meantime, two women filed police reports of assault against him going as far back as the 1970s. The board of directors itself now faces multiple lawsuits—from company shareholders, from the New York State Comptroller Thomas DiNapoli, from the State of Oregon—for not taking action sooner in spite of being repeatedly alerted to Wynn’s behavior. By March, board directors were resigning.

When asked for comment, Wynn’s personal team sent this statement to NREI in mid-April: “Mr. Steve A. Wynn announced today he has resolved all outstanding legal issues with his former wife, Elaine Pascal Wynn. Mr. Wynn expressed gratification that he and Ms. Wynn were able to put all of the personal unpleasantness of the last few years behind them.”

The allegations against Wynn are among the most high-profile and explosive that have emerged in the era of the #MeToo movement. And it shines an uncomfortable spotlight on what has been an open secret in the industry for decades: Like other sectors, the commercial real estate industry has a problem when it comes to sexual harassment and sexual discrimination.

Commercial real estate is a notoriously male-dominated industry. A 2013 study by commercial real estate development association NAIOP, for example, found that women accounted for just 21.6 percent of all commercial real estate professionals and only 14.6 percent of the industry’s senior executives.

But what’s worse is that according to results of exclusive research conducted by NREI administered between Feb. 13 and Feb. 26, women in the industry routinely face harassment and unwanted sexual advances. And everyone knows it. Overall, 87.0 percent of respondents agreed with the sentiment that sexual harassment occurs in the commercial real estate industry. (The survey was not explicitly designed to take up harassment or discrimination against members of the LGBTQ community, but some respondents addressed that issue in open-ended comments as well.)

This perception did not vary much between women and men. A full 90.0 percent of female respondents said that sexual harassment happens in the commercial real estate industry. In addition, 55.3 percent of women reported being personally harassed, 43.6 percent said they witnessed harassment in the workplace and 26.6 percent said it has happened to a friend, family member or colleague involved in the industry. (Respondents were allowed to select multiple options.) Only 23.9 percent of women said they did not personally experience or encounter such behavior.

Among male respondents, 84.4 percent said that harassment occurs in the industry. In addition, 28.9 percent said they witnessed harassment taking place, 14.1 percent said that a family member, friend or colleague in the industry had experienced it and 8.0 percent said they personally experienced it. Meanwhile, 59.0 percent said they had not personally experienced or encounter harassment in the workplace.

Respondents that said sexual harassment occurs within the industry were further asked to quantify how much they think it occurs. More than 40 percent of these respondents (42.9 percent) indicated that while harassment was not widespread in the industry, it was nevertheless a common occurrence. In addition, 9.9 percent felt it is rampant and 17.9 percent said it was rare. Another 29.3 percent said they were not sure how common it is.

The results in NREI’s research correspond closely with the findings of a similar survey recently administered by the Mortgage Bankers Association’s (MBA) mPower division, a group devoted to promoting opportunities for women in the real estate finance industry.

Using the EEOC definition of workplace sexual harassment—unwelcome advances, requests for sexual favors and verbal and physical conduct of sexual nature when submission to such conduct is explicitly or implicitly made a condition of employment—the survey found that 75 percent of respondents indicated they experienced such behavior at least once during their career in real estate finance. The most frequent behavior cited involved inappropriate comments, but more than 50 percent of respondents experienced inappropriate touching and close to 50 percent reported unwanted sexual advances.

While the findings were based on “voluntary, informal results” and “are not meant to represent the experiences of the entire mPower community or industry at large,” they nevertheless “represent the experiences of hundreds of women in our industry, and the trends in the survey have been validated by several in-person polling results that have taken place at recent MBA events,” according to mPower founder and COO Marcia Davies.

In open-ended responses, participants in the NREI survey described instances ranging from inappropriate comments and vulgar language to being unexpectedly kissed, given unasked-for back rubs by coworkers or slapped on the backside by colleagues. They have also reported being propositioned, having their superiors show up at their hotel rooms during business conferences or having clients imply that providing sexual favors would help them close deals.

As one respondents described the situation in a comment, “Unwanted advances or language has made me uncomfortable, but a firm ‘no’ has sufficed in curtailing the problem person. Inappropriate language is more of a problem and tolerated or excused too often. It is a workplace, not the boys’ locker room.”

Another respondent, a man, very similarly described “just a general atmosphere at the office that is like a men’s locker room, with sexual innuendo, dirty jokes, sexist remarks.”

Several people pointed out that offending behavior often takes place at business conferences, outside the office, where alcohol is then blamed for inappropriate comments or actions.

Respondents that said they had been harassed, witnessed harassment or knew of family members, friends or colleagues in the industry that were harassed were asked whether at the time of the incident their workplaces had a means of addressing these issues.

Of those respondents, 38.8 percent said their workplaces did not have mechanisms in place to report and prevent harassment. Another 29.4 percent said there were channels for reporting harassment at their workplace, but the rules about how to go about doing so were unclear. Only 16.1 percent said their employer had “clear rules and protocol in place” to address harassment.

Yet in most cases, even when the workplace had clear guidelines regarding acceptable behavior, respondents hesitated to report violations due to the fear of being ostracized or because the behavior came from top management.

As a result, 63.7 percent reported that they did not make use of workplace protections to deal with the harassment, while 36.3 percent said that they did so. (Those figures are better than the average for U.S. workplaces as a whole—the Society for Human Resources Management (SHRM) reports that 76 percent of non-manager employees who experience sexual harassment don’t report it, either because they fear retribution or because they don’t believe doing so will lead to positive changes.)

Another issue that respondents encountered was when the harassment came not from within their own company, but from an outside source—a client firm’s employee, for example, or a fellow conference attendee. In that case, their employer had limited means of addressing the issue in any case.

When it comes to NREI survey respondents, in those cases where the behavior was reported, the situation seemed to be resolved in a satisfactory manner in about half the cases, according to the open comments section. Some offenders were terminated, while others were temporarily dismissed from work without pay. In one instance, a respondent was surprised the owner of the company took disciplinary action even though the offender was his relative. In other cases, human resources ended up doing nothing after being informed of the incidents, or encouraged those reporting the behavior to find another place of work.

Overall, 41.0 percent of respondents said they felt the prevalence of sexual harassment in the commercial real estate industry has improved in the past five years, while 57.3 percent said things have remained the same. Only 1.6 percent of respondents said the situation has gotten worse. (The numbers were fairly consistent for both men and women in that regard, although men (44.0 percent said it has improved) had a slightly rosier view than women (37.1 percent said the situation has improved).

According to one respondent’s comment, instances of sexual harassment “used to be more prevalent during the 1980-1990 period… I think the industry overall has done a good job of curbing the issues and making sure sensitivity training completed now on new hires.”

In the open comments section, many respondents indicated that the industry could benefit from more training on which behaviors constitute sexual harassment—“I think many people don’t realize they are being offensive,” wrote one. “Education is #1. Many of the older men have no idea that what they say is offensive,” noted another. “Many men do not even know sexual harassment exists and, particularly, what constitutes as harassment,” wrote a third. “From my perception, many people think sexual harassment is an action, but in truth, it is also words. Defining sexual harassment and giving examples would help because most people don’t even know they are doing it, especially when they think they’re just mimicking their senior associates.”

Another frequent comment cited the need to correct the gender imbalance in the commercial real estate industry as a potential deterrent to disrespectful behavior, along with the greater promotion of women to executive roles. A few respondents called for the creation of an independent agency that would handle harassment claims, thus providing unbiased investigations and eliminating the fear of retribution that sometimes accompanies reporting misconduct internally. According to one respondent, it is an issue of “stronger enforcement” across the industry, not just at one’s own company: “What are organizations doing about sexual harassment by clients or competitors at industry events?”

On that front, the issue is not one leading organizations or companies appear comfortable addressing. NREI reached out to 11 different industry organizations to discuss our findings. Only three—the MBA, the Commercial Real Estate Women Network (CREW) and the Institute of Real Estate Management (IREM)—got back to us. We also reached out to several of the biggest brokerage firms in the industry—some declined to comment, while others never responded to requests for comment.

Methodology: The NREI survey included 449 participants. Respondents’ professional specializations ranged from leasing/investment sales/land brokerage (16.3 percent) to private real estate investment (12.0 percent) to pension fund/institutional investor/fund management (6.8 percent) to corporate real estate (9.1 percent) and building/development (11.3 percent), among other categories. The most commonly cited organization size involved firms with fewer than 10 employees (26.8 percent), followed by firms employing from 11 to 50 people (23.2 percent) and then firms of 1,000 or more people (19.4 percent). The average age of respondents was 50 years old. Men made up 57.0 percent of respondents, while women made up 43.0 percent.

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