Posted on June 2, 2020 · Posted in Industrial / Flex, Investments, Land, Multi-Family, Office, Property Management, Retail

As anger and frustration over racism and police brutality grip the nation, real estate executives and business leaders are promising change — and pleading for peaceful protest.

George Floyd, a black man in Minneapolis, died May 25 after a police officer knelt on his neck for nearly nine minutes. His death, ruled a homicide by two medical examiners, has prompted demonstrations, and in some instances destruction and violence, across the country.

The events led the industry — which has long been criticized for its lack of diversity — to reflect on what it and others can do to address the crisis at hand and the long-term problems that led to it.

Compass’ Robert Reffkin, one of few minority chief executives in the brokerage business, described himself in an email to agents as a “Black man who has felt out of place his entire life.”

“I’m heartbroken that all this pain we’re feeling, all of the energy being generated, all of the moral clarity that a moment like this creates — might still not lead to enough change,” Reffkin wrote. “Because I know how rare it is to feel this much momentum on something so important, and how easy it is for the moment to slip away or get out of control.”

Real estate executives are not known for weighing in on controversial topics, and most of their public statements avoided even mentioning police. But some signaled that they would be proactive and would change from within.

“I can no longer be silent,” Pam Liebman, CEO of the Corcoran Group, wrote in an email to agents. “The murder of George Floyd is an abomination. It’s more unwelcome evidence — as if we needed it — of a specter that’s haunted this country for four hundred years. Today, you have my word that we are taking a microscope to this company and we are redoubling our commitment to inclusion and justice.”

James Whelan, president of the Real Estate Board of New York, said Floyd’s killing underscores “systemic issues of race and class” that the city and country have failed to address. While he condemned violence, he pledged the industry would provide real solutions and “not just lip service.”

Douglas Elliman, with some 7,000 agents around the country, issued its own call to action.

“Our hope is that we channel our deep anger, frustration and despair into collective and production action,” executives wrote in an email Monday. “Each of us has our own strength to add to the solution: March. Donate. Vote. We can all help make a difference.”

Zach Aarons, co-founder of proptech accelerator MetaProp, said it’s not enough to step up just in times of crisis. Of the 77 companies MetaProp has backed, nearly 10 percent of CEOs are people of color.

“I’d like to get it up to 50 percent,” Aarons said. “But also, 10 percent ain’t nothing. The system doesn’t just take care of itself. It’s a constant effort to try to raise the bar because it’s immensely important and the stakes are very high.”

The Wing’s CEO Audrey Gelman said workers are not required to use paid time off if they choose to protest. The female-oriented co-working startup also made $200,000 a corporate donation to Color of Change, the NAACP Legal Defense Fund and the Brooklyn Community Bail Fund.

Compound, a real estate investment startup founded in 2016 to level the playing field for home ownership, said in a company-wide email Monday that it stood “shoulder to shoulder” with those demanding radical change.

“Many are saying, ‘America is broken.’ It’s not. Being broken implies that it was once intact, and it’s time for us to acknowledge that American was built this way,” the email said. “This is one of our country’s darkest hours, but it may also mark the start of a new era: one where all Americans feel the same level of security under the law and have the same chance of prosperity. But, it’s on each of us to make sure that happens.”

Personal Anguish, Collective Despair

Three years ago, real estate leaders were largely silent even as major corporations lambasted President Donald Trump for blaming “many sides” for neo-Nazi violence in Charlottesville, Virginia. This time is different. The horror over Floyd’s death awakened both personal anguish and collective despair for many Americans.

On Twitter, Nooklyn’s Moiz Malik said that growing up post 9/11 as an immigrant and person of color, he was called “sand n****r” more times than he could count.

“One day, a kid yelled that term at me, jumped over the bus seat, and stabbed me in the leg with a pencil,” Malik wrote. “I don’t remember much about the altercation other than even though I was attacked and only defended myself, I was suspended from school for a week, while the other kids weren’t.”

“America is in crisis,” wrote Don Peebles, chair of development firm the Peebles Organization and one of the most prominent developers of color. He called on business leaders to step up. “Black Americans are frustrated and feel hopeless,” he wrote on Twitter, urging Americans to “fight for fairness not destruction.”

Developer Francis Greenburger said that while he doesn’t condone acts of violence or vandalism, he blames the Trump administration for allocating resources away from critical issues, such as the country’s criminal justice system.

And John Gomes, an agent at Douglas Elliman, wrote on Instagram: “I’m sick and tired of being sick and tired!”

Calling Out Police Brutality

In addition to blanket statements condemning racism, several real estate executives lashed out against a pattern of police brutality.

“No one deserves to fear for their lives when dealing with the police, especially not when that fear is due to the color of their skin,” said developer and investor Moishe Mana. “Enough is enough. We should hold accountable the individual officer, his commanders, and the police department that allowed a culture of reckless violence to exist.”

The four Minneapolis police officers involved in Floyd’s death were fired after a video of the killing was made public. Derek Chauvin, who was seen with his knee down on Floyd’s neck, was later charged with third-degree murder and second-degree manslaughter.

Washington Post data show black Americans are twice as likely as whites to be shot and killed by police. In an analysis of 4,728 shootings since Jan. 1, 2015, the paper counted 2,385 victims who were white; 1,252 who were black; 877 who were Hispanic and 214 from other racial groups.

An email sent to all of Blackstone’s 2,900 employees noted that Floyd’s death came “on the heels of other wrongful deaths of African Americans.”

And it reiterated the firm’s “zero tolerance” stance on racism. “You don’t need to identify with an affinity group to show your support and help us promote inclusion.”

Bess Freedman, CEO of Brown Harris Stevens, said on Instagram that she donated to the Equal Justice Initiative, which works to end mass incarceration and racial inequality

“Besides posting, let’s support places that push for changes,” Freedman said. In a memo to agents Monday, Freedman said, “As real estate professionals, we serve our communities, and it is incumbent upon us to stand with them as they grieve and rebuild. We are all human first.”

But on the other side of the aisle, Paul Massey, of B6 Real Estate Advisors, said unequivocally that “violent protest is not acceptable under any circumstances.”

“It’s terrible to think about what happened to George Floyd,” said Massey, the former brokerage chief, who briefly ran for mayor of New York City in 2017. “Along with that, I think police departments across the country need to be vigilant to protect people against these kinds of excesses.”

John Catsimatidis, another one-time mayoral hopeful, said he thought the police showed enough restraint.

“They should have brought in more national guardsmen if they needed troops,” said Catsimatidis, the billionaire developer and Gristedes owner.

On Monday, the National Guard said it deployed 12,000 additional guardsmen in response to civil unrest in 23 states and Washington, D.C. There are now 67,000 guardsmen activated, the most in U.S. history. And major cities across the country have implemented curfews to stem potential violence.

Still, Catsimatidis took a hard line against some of the protesters.

Giving a pass to “peaceful demonstrators that just want to discuss their outrage,” Catsimatidis characterized others as “crooks that were released from Rikers Island” and “radicals that come in from out of state…using the innocent people that just want to march as pawns to hide behind.”

“How Do You Come Out Of This?”

Violent protests over the weekend have hit real estate owners close to home, particularly after Covid-19 hurt an already-struggling retail sector. After dozens of stores in Soho were vandalized over the weekend, retailers on Fifth Avenue boarded up windows on Monday, fearing more chaos. In Los Angeles, demonstrators closed the northbound lanes of the 405 Freeway, prompting a citywide curfew as of 6 p.m. Protestors shattered store windows in Santa Monica and Long Beach.

Gary Weiss, a commercial real estate broker at LA Realty Partners, said physical retail has been consumed by a “shitstorm” all year.

“If you’re a small business owner on Melrose Avenue, how do you come out of this? I feel terrible for those people,” Weiss said.

In New York City — where Gov. Andrew Cuomo imposed an 11 p.m. curfew — Catsimitidis said he doubled the security at his Gristedes stores.

“I hope they get it under control tonight,” Catsimitidis said.

Others who condemned violence and destruction urged protesters to channel their anger. On Twitter, Scott Rechler, chairman and CEO of RXR Realty, encouraged demonstrators to vote for change at the ballot box.

Peebles tweeted a video that depicted protestors vandalizing a black-owned store.

“This is a consequence of unfocused rage and frustration. We need to demand equal economic opportunity and not destroy thers’ dreams!” Peebles tweeted.

Greenburger called looting “horrible” for the city and its merchants.

“But we are dealing with a double crisis here,” Greenburger said. “For society to function, everybody in the society has to feel that they have a stake worth protecting. When despair sets in, and they feel like they have no stake, they react in an incensed and irrational way.”

 

Source: The Real Deal

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