When Tammy Jones decided to launch her own business, she found a partner in her former client, the Manhattan development and investment firm JEMB Realty.
The two formed Basis Investment Group in 2009, and 11 years later, the company has closed roughly $4 billion in commercial real estate debt and structured equity across the U.S. Jones, the firm’s CEO and majority owner, has more than 25 years of experience in the industry, having previously worked for pension fund managers and investment platforms, including subsidiaries of GMACCM, Equitable Real Estate and Caisse de dépôt.
Basis teamed up with the city in 2016 to create the Emerging Development Fund, which has raised $20 million so far and is dedicated to providing loans to less established developers for predevelopment and acquisition costs.
Jones, who recently joined Mack-Cali Realty Corporation’s board of directors, serves as the chair of the Real Estate Executive Council, a trade association for minorities working in commercial real estate. She said the organization has put together a series of principles for real estate companies to follow, which includes “being intentional” about supporting minorities, not just in their hiring decisions, but in their business plans as well.
For its part, Basis has invested and loaned $800 million with other minority and women-owned commercial real estate platforms, Jones said. Additionally, 53 percent of the firm’s vendors are women and minority-owned firms, and 78 percent of Basis’ team is made up of women and minorities, she said.
In an extensive interview with The Real Deal this month, Jones talked about the industry’s need to put words into action and what strategies companies can implement to become more diverse.
“When people tell me that they can’t find minorities, I say, ‘You’re not looking in the right place,’” she said. “‘You’re not intentional about what you’re doing.’”
You launched your firm in the middle of the 2009 economic crisis. Why then? I saw many people leave the institutional framework and go out on their own during various downturns. I believe that there are opportunities in downturns. I was at a place where I knew that I had the track record of investing and lending. I had done it successfully for platforms and that this was my time to try to do it on my own.
At a recent panel, you said you felt that your capabilities have been questioned throughout your entire career. Can you talk about that? As an African-American woman in real estate, I have the double whammy — gender bias, as well as ethnic bias. Commercial real estate, as you know, has a severe problem with diversity, particularly at the senior levels. I’ve always felt like I had to be better, stronger, faster, more educated than my white male counterparts. I’ve had every experience from people being promoted over me that probably didn’t have as much experience as me, to being in meetings where people walked right by me because they assumed that I wasn’t in charge. Even recently [with my] fund, some investors, because I was a diverse manager, saw risk. It’s unconscious bias, and it’s there. It’s just harder for us.
A number of real estate companies came out and made statements in response to the death of George Floyd. What was your reaction to those statements, and do you think that they will lead to lasting systemic change? I am cautiously optimistic. I definitely sense that there’s some shift, and I appreciate the statements. I want to make that clear that it was encouraging to hear so many industry leaders and CEOs actually take a stand against systemic and structural racism because it is alive and well in the United States. I’m hopeful that it will lead to systemic change because the statements are not enough. We need action.
What steps do you think real estate companies can take to make these statements actionable? I believe that every firm needs to create a diversity business plan. I challenge people to think about diversity as a business imperative that needs to have concrete strategies. I often talk to CEOs and say, “What initiative would you ever start without a business plan? Can you imagine if you started a multifamily value-add business, and you didn’t have concrete strategies?”
One strategy could be, by way of example, look at your website. If you don’t have any board members or senior leaders who are African American, well, hello, that’s a strategy. We’re going to figure out how to change that. Have some performance metrics. You could say, “Well, 20 percent of our board is going to be diverse, or African American.”
What are some other steps? We continue to go and write checks or fund early stage programs, and what I think we really need for systemic change is to look at a broader ecosystem of diversity. You have to understand what’s going on with the African Americans in your company. Why haven’t they been promoted? Do they have sponsorship? Ask yourselves those questions. Then, of course, look through the senior leadership team and figure out how to affect change, and then finally on your board. We can’t just focus on hiring. That’s what everybody assumes is the way to go. And it is. But you also have to think about helping to create entrepreneurs. We should also look at ways to partner. Larger firms can partner with smaller African-American general partners. You have to have this dual approach, both hiring and helping to provide access to capital and credit.
Is that an issue you’ve encountered personally? The biggest challenge that I faced was access to capital. Not just capital, but access to lines, subscription lines, warehouse lines, working capital lines. Those are barriers to entry. There is not a single African-American–owned diversified commercial real estate platform in the United States that’s large and scalable, like a KKR or BlackRock or Brookfield, not one.
When I see that happen, then I’ll know we’ve really changed. And how that happens is partnership. We have to realize that none of us can do this alone. Who do you do business with? Don’t just look at your hiring, don’t just look at your partnerships and your boards and your senior leadership team. Who are your accountants? Do they have any black partners? Who are your lawyers? Who are your brokers? You have to be intentional. You have to measure. And you have to break down what the real problems are.
Over the years when I’ve asked real estate companies about the lack of diversity in the industry, their response has often been that real estate should be a meritocracy, which seems to gloss over the issues that you raised. You know what I say? Let’s just pretend that we are both running a race. And if you think about it, African Americans after the Civil Rights Act, basically we were told, “Go run your race.” But if we were running a race and you had a significant head start — 400 years — how on earth can you ever expect to catch up in that race?
If you really think about it, the only way that I can catch up is if somebody picks me up in a car and drives me up.
This interview has been edited for length and clarity.