LAS VEGAS — Minorities in commercial real estate remain conspicuously scarce, though more U.S. retailers have found they can profit from a more diverse well of expertise as they expand to urban areas and market more niche-market specialty products, said panelists discussing "Doing Business with Minority Owned Businesses," at the International Council of Shopping Centers’ Spring Convention taking place here this week.

Some retailers have expanded to urban areas of New York and Washington "and are really shocked to find...the stores outperform Beverly Hills," said Derrick Mashore, executive managing director of Globe Client Solution for Cushman & Wakefield of New York.

Although the push for industry change has accelerated in the past few years, a maddening lack of minority representation still dogs the business, said panelists at the program, which was the first session of its kind at the annual national gathering.

Of the approximately 100,000 professionals active in commercial real estate, less than 1% are African American, according to economists and industry trade groups. That pales in comparison with the general U.S. executive and managerial talent pool, where blacks comprise about 8%.

Lack of integration is a deep-seeded trend attributed in part to the closely held nature of the business and the lack of public scrutiny that pressures other industries with more public exposure, say officials of Concordis Real Estate. The Chicago-base joint venture, which helped create a national network for minorities trying to enter the industry, was formed in early 2003 by 10 African-American-owned real estate firms.

While it remains an anomoly, Concordis has evolved into a market-driven firm whose clients include Hewlett-Packard Co., Cushman & Wakefield, Sears, Wal-Mart, Bank One and the $300 million Detroit police-and-fire pension fund.

"There's no question that there are deals to be made using this route because more and more, suppliers are looking for diverse market channels," said Mashore. High-level executives at Cushman & Wakefield concluded that "there was an abysmally small number of minorities in the company," and is committed to bringing more on board in awareness that it "will create additional value for clients," he said.

Robert Bray, vice president of real estate for Wal-Mart Stores Inc. of Bentonville, Ark., said the retailer "has attempted to use minority vendors in all aspects." But the effort to add more minorities to its real estate staff "is still in its infancy," he said.

Bray, however, emphasized that Wal-Mart is the largest employer of Hispanics (120,000) and African Americans (180,000). "We want to grow our customer base and to do that, we have to penetrate the core of the cities...and we have explored more urban areas in the last 24 months than we have historically."

Blockbuster Video has pushed into more diverse areas in recent years and tries to tailor its video mix more to Latino and African-American products, said Jason Huggins, director of leasing for the Dallas-based chain and a member of the retailer's diversity council.

The lack of minorities has hampered commercial development efforts in many urban areas because those communities don't have advocates like real estate brokers who can sell investors on the merits of local consumers, said Ivan Boone, who is president of both Concordia and Frontier Real Estate of Chicago. "The brokerage community is where the matches are made...What's really needed is a better grassroots connection with the populations in urban areas."

Diversity also has been hampered by the commercial real estate industry's long-time focus on development in predominantly white suburbs, said Michael Bush, founder and executive director of Project REAP (Real Estate Apprentice Program) of Washington, D.C., which promotes growth in the commercial real estate minority population. "But the industry has come back (to realize) there is money to be made in urban markets with wall-to-wall people and regentrification."

The cost of ignoring the need for broader racial representation in the retail industry can be steep. Bush was a real estate executive with a supermarket chain in the early 1990's that "ignored the ethnic market and lost a significant market share to (a chain) that had minority buyers and minority market analysts," he said. As a consequence, we not only lost market share, some of it (was lost) permanently."

Mashore notes the minority shortage "has been a decades-old issue in this industry. Real estate has been disastrously behind" the rest of the business world. However, Mashore added that progress of the past few years has shown retailers that it's not just the right thing to do, it is a strategic move that pays off."