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INDUSTRY EMBRACING DIVERSITY, SPEAKERS SAY

BY DEBRA HAZEL

The retail real estate industry is making progress on embracing racial and ethnic diversity, said the speakers at a Spring Convention panel discussion titled “Doing Business with Minority-Owned Businesses.”

“In the last few years, we’ve been trying to get some traction on this issue,” said Derrick Mashore, executive managing director of globe client solutions at New York City-based Cushman & Wakefield. “It’s a very recent emerging trend.”

For about four years Cushman & Wakefield has had a “far-reaching” inclusion initiative in place that is beginning to see significant success, he said.

One reason the issue is so late in the industry is that retail has been focused on suburban growth, said Mike Bush, founder and executive director of The Washington, D.C.-based Project REAP (The Real Estate Associate Program). This program aims to open professional opportunities in commercial real estate to African-Americans. As retail development turns to the more racially diverse cities, developers and retailers are seeking to diversify their staffs, the vendors they hire and the stores themselves.

“You want to have a tenant mix that appeals to your market,” Bush said. “One-size-fits-all doesn’t work.”

Earlier this year General Growth Properties set a goal of finding urban locations and forming alliances with minority service providers across the country, said Lyneir D. Richardson, General Growth’s vice president of urban land development. The program provides some startup capital for minority business operators in its regional malls.

McKinney, Texas-based video rental and entertainment company Blockbuster created a diversity council and hired an officer to handle such issues about two years ago, said Jason Huggins, Blockbuster’s director of lease administration. The company is careful not to make assumptions about any consumer markets, he said.

“When you go into an urban market, that doesn’t mean it’s diverse,” Huggins said. “And a diverse market isn’t necessarily urban.”

Wal-Mart Stores created an office of diversity this year.

“We are trying to reach out across a broader base,” said Robert Bray, CSM, a Wal-Mart vice president of real estate. The megaretailer is the largest employer of African-Americans and Hispanics in the United States, he added.

Not only is reaching out to minorities a moral imperative, the panelists said, there are sound economic reasons for doing so.

“I have a number of clients who were shocked at the numbers,” Mashore said. “Stores at 125th Street [in New York City’s Harlem] are outperforming Tysons Corner and Beverly Hills.”

Bray, who was head of real estate for Giant Food in the Washington, D.C., area in the 1990s, said the supermarket chain ignored ethnic markets at one time.

“As a result, we lost significant share to companies that had minority buyers and market analysts,” he recalled. Today Giant Food is a partner in Project REAP.

Local brokers can be of immense help with market specifics and sensitivities, the group said. “These programs are about casting a wider net,” Richardson said.

Project REAP’s Bush noted that diversity wasn’t even being discussed in real estate circles five years ago. But in recent years the number of females and minorities among employees and on corporate boards has increased.

Much is still to be done.

“There is still an opportunity to do a better and better job,” said Wal-Mart’s Bray. “We’re still in our infancy.”