Commercial real estate pioneers; Old friends stand out in non-diverse industry By Walter Woods
6/12/2005 - William Lampley (KSM '94), was a former West Point football star and a Northwestern MBA a decade ago when he got a plum job offer, finding office space for corporate clients at Jones Lang LaSalle, one of the top real estate firms in the country.
But before he took the job, Lampley asked to speak with other minorities at Jones Lang LaSalle's Atlanta office. The recruiter was frank: "If you accept the offer, you'd be it."
Commercial real estate is one of metro Atlanta's most prominent industries, raising its skyline and profile, captaining key groups like the Metro Atlanta Chamber of Commerce, even inspiring a famous novel (Tom Wolfe's A Man in Full) that tried to capture the city.
But visit a typical real estate firm's offices, or network the industry breakfasts and cocktail mixers, or tee up at the charity golf outings, and you'll find a business overwhelmingly white and male, one that's noticeably less diverse than the corporate clientele it serves.
Nationally, there are only a few commercial real estate companies founded, run and owned by African-Americans. Lampley, who has worked at Jones Lang LaSalle for the past decade, and James Pitts (KSM '95), a friend he met on the basketball court in business school, are trying to change that.
After some water cooler soul-searching and heart-to-heart conversations with their wives, Lampley and Pitts chucked their comfortable jobs at Jones Lang LaSalle and, with "nervous angst," as Lampley put it, formed Kellogg Partners. (The company is named for the Kellogg School of Management at Northwestern University in Evanston, Ill., where the pair met.)
Their two-man start-up is among the first of its kind in the city: an African-American-owned brokerage firm that finds office space for corporate clients. "We intend to open the door for more minorities to enter the tough-to-crack world of commercial real estate," Pitts said.
Development concerns and brokerage houses have been slower than law firms, accountants or other corporate service providers to embrace diversity. Last year, there were proportionally more black pilots, surgeons and architects than African-Americans in commercial real estate, according to the U.S. Department of Labor.
$5 trillion industry
Nationally, the $5 trillion commercial real estate industry has about 100,000 professionals; of those, fewer than 1 percent are minorities, and that small percentage includes women, said Bennie H. Dixon, president of the Real Estate Executive Council, a group formed in Chicago two years ago to recruit minorities to the industry.
That's sharply lower than other professional service industries: Of the 1.7 million accountants in the country, about 9 percent are African-American. Of the nearly 1 million American lawyers, blacks make up about 5 percent.
"When I joined Fannie Mae in 1963 there were no minorities ... outside of the mail room," Dixon said of the mortgage giant where he spent much of his career. "The nation is making an effort, but it's something we're still battling years after Brown vs. Board of Education," the U.S. Supreme Court decision that ruled an end to school segregation.
The reasons are rooted in history. White men controlled most of the land in the United States and started the development industry.
"It's still in the hands of white males," Dixon said. "I'm not knocking it --- that's just the way it is."
Today, much of the commercial real estate industry is composed of smaller, privately held partnerships, firms founded and run by trailblazers and their proteges. Father-and-son teams are not uncommon. And because the firms are small, some lack professional human resources advice.
That climate makes the industry clubby and harder for outsiders to penetrate, said Aasia Mustakeem, a longtime Atlanta real estate attorney and a partner at Powell Goldstein. Firms end up finding new hires among the friends of current employees, she said. It's "who you know ... it's been a good ol' boys kind of thing."
Pitts and Lampley are unique, though there are some high-profile --- even legendary --- minorities in commercial real estate development.
Construction firm H.J. Russell & Co. helped build Coke's and Georgia-Pacific's headquarters and Atlanta's City Hall. Harold A. Dawson Co. has been building local projects, like downtown's Museum Tower condos, since 1969. In 1993, Egbert Perry founded the Integral Group, which is redeveloping Auburn Avenue and, with partners, City Hall East.
Basketball superstar Magic Johnson also is dabbling in Midtown condos. Dallas Cowboy great Emmitt Smith last month joined Staubach Co., a Texas developer founded by Roger Staubach. Lisa Borders, president of the Atlanta City Council, stayed on as vice president of Cousins Properties after her election last year.
"But look at the industry as a whole and we're not very diverse, and we need to be," said Jack Durburg, head of the Chicago office of CB Richard Ellis, the country's largest real estate services firm. The industry needs more diversity "because its the right thing to do, and it's good business," he said.
Changes in wind
But the industry, particularly larger firms like Cushman & Wakefield and publicly traded companies like CB Richard Ellis, may be changing, Dixon said. Many firms are recruiting minorities and trying to mirror Fortune 500 America, largely because their big clients are starting to demand it.
"More and more clients are starting to ask," Lampley said. While at Jones Lang LaSalle, he counseled companies like Bank of America, Xerox and Aetna. In December, he put Ernst & Young in a new Atlanta headquarters near the Georgia Aquarium downtown.
"Quite frankly, [many companies] want to deal with a real estate firm that looks more like them," he said.
As Durburg at CB Richard Ellis related, "I can tell you, on the corporate side, clients are certainly asking us what we're doing via diversity. I don't know, and no one knows, if decisions are made based on that, but they're asking the question, and you need to be able to respond with 'yes.' "