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MEET
ETHAN PENNER
Ethan is an innovator, philosopher, and change agent who has always been drawn to bringing solutions to large voids. He has been a leader in the US real estate finance industry for more than three decades and is broadly credited with being the primary driver in the creation of the Commercial Mortgage-Backed Securities market in the early 1990’s while at Nomura Securities, where he built the then largest real estate financier in U.S. history from a standing start in response to that period’s historic dislocation. Ethan has received broad industry recognition, including being named in 2011 by Real Estate Forum, in their 65th anniversary issue, as one of the industry’s 65 living legends. Ethan has continued to be at the forefront of the real estate industry, having built and led a number of real estate investment management companies including CBRE Capital Partners in partnership with CB Richard Ellis in 2008 in response to the GFC and Mosaic Real Estate Investors. Ethan is currently the Chairman of Hill Street Realty, an investment manager focused on owning and operating U.S. multifamily. He has been an adjunct professor for the past decade teaching first at USC’s graduate business school and next at Pepperdine University, is the author of Greatness is a Choice which was published and released by Wiley in November 2023 and publishes his bi-weekly Friday Five wherein he shares his top societal observations with his audience. Ethan’s next book entitled Awareness in Prayer is scheduled to be released mid-2025.
Ethan is an innovator, philosopher, and change agent who has always been drawn to bringing solutions to large voids. He has been a leader in the US real estate finance industry for more than three decades and is broadly credited with being the primary driver in the creation of the Commercial Mortgage-Backed Securities market in the early 1990’s while at Nomura Securities, where he built the then largest real estate financier in U.S. history from a standing start in response to that period’s historic dislocation. Ethan has received broad industry recognition, including being named in 2011 by Real Estate Forum, in their 65th anniversary issue, as one of the industry’s 65 living legends. Ethan has continued to be at the forefront of the real estate industry, having built and led a number of real estate investment management companies including CBRE Capital Partners in partnership with CB Richard Ellis in 2008 in response to the GFC and Mosaic Real Estate Investors. Ethan is currently the Chairman of Hill Street Realty, an investment manager focused on owning and operating U.S. multifamily. He has been an adjunct professor for the past decade teaching first at USC’s graduate business school and next at Pepperdine University, is the author of Greatness is a Choice which was published and released by Wiley in November 2023 and publishes his bi-weekly Friday Five wherein he shares his top societal observations with his audience. Ethan’s next book entitled Awareness in Prayer is scheduled to be released mid-2025.
Ethan's Bio
Ethan is an innovator, philosopher, and change agent who has always been drawn to bringing solutions to large voids. He has been a leader in the US real estate finance industry for more than three decades and is broadly credited with being the primary driver in the creation of the Commercial Mortgage-Backed Securities market in the early 1990’s while at Nomura Securities, where he built the then largest real estate financier in U.S. history from a standing start in response to that period’s historic dislocation.
Ethan has received broad industry recognition, including being named in 2011 by Real Estate Forum, in their 65th anniversary issue, as one of the industry’s 65 living legends. Ethan has continued to be at the forefront of the real estate industry, having built and led a number of real estate investment management companies including CBRE Capital Partners in partnership with CB Richard Ellis in 2008 in response to the GFC and Mosaic Real Estate Investors. Ethan is currently the Chairman of Hill Street Realty, an investment manager focused on owning and operating U.S. multifamily.
He has been an adjunct professor for the past decade teaching first at USC’s graduate business school and next at Pepperdine University, is the author of Greatness is a Choice which was published and released by Wiley in November 2023 and publishes his bi-weekly Friday Five wherein he shares his top societal observations with his audience. Ethan’s next book entitled Awareness in Prayer is scheduled to be released mid-2025.
ETHAN PENNER BOOK
Discover a treasury of thought-provoking insights in "Greatness Is a Choice" by Ethan Penner. From challenging societal norms to redefining personal success, this book inspires critical thinking and societal improvement. A must-read for those seeking personal and social fulfillment.
Ethan's Lessons Learned
Success is best found balancing these two, often contradicting approaches, and a solid management team should have both perspectives represented.
While it is critical to have the alertness of a trader, which was my roots as a professional, it is also valuable to think longer term.
Many investment professionals are rewarded/incentivized to max out their performance and are thus trained to do so and at the expense of the downside protection of staying power. Investing with them will often be a wild ride.
Staying power comes at the expense of yield and the investment in staying power is one that always makes sense to make
Market bubbles are often characterized by abundant liquidity, abundant availability of cheap financing, high financial market valuations, and low asset yields. There can be money made in these times, and especially in the years leading up to a correction those who invest most aggressively are the ones who do the best. However, knowing when the bubble will burst is impossible and it is best to just sit out the bubble period entirely rather than try to either time the correction or scour the landscape for a differentiated strategy. When the correction hits, everyone will be hurt, and those with cash who were disciplined will be in an enviable spot.
There are times to go to Hawaii and stay in all cash.
When market’s turn most all financial assets (stocks and bonds) get clobbered. There is nowhere to hide.
Diversification has limited benefit.
They benefit from federal government financing through FNMA and FHLMC, which makes those apartments somewhat immune to the risks of systemic illiquidity. This benefit affords apartment owners to comfortably run their business at higher leverage levels than other property type owners, which gives those owners a much stronger performing investment during inflationary times. Also, in economic downturns, when most real estate is suffering from weakened tenancy, the basic need for shelter tends to afford far more tenant stability.
Apartments are special.
Financial asset value appreciation is another way of saying currency devaluation, which given the government's inclination to overspend is a pretty safe thing to bet on.
Financial Asset
Career Highlights
Mosaic Real Estate Investors – Founder & Managing Partner
Mosaic was founded in 2015 focused on real estate structured finance investments. It’s flagship fund, Mosaic Real Estate Credit (“MREC”) was an open-ended fund that at its peak represented more than 100 independent Registered Investment Advisors representing approximately 1800 individual investors who in total committed $550 million and was growing rapidly until the Covid-19 pandemic hit. Fearing that the pandemic might have a harmful impact both on the valuations, cash flows, and liquidity of its portfolio, MREC’s management sought to produce liquidity for its investors. This culminated in a merger of the fund with the publicly traded mortgage REIT Ready Capital (NYSE: RC) that closed in March of 2022. While the pandemic’s impact proved to be extremely harmful to the entire industry, the merger did provide MREC investors with instant liquidity at market peak pricing for more than 80% of NAV. Mosaic also managed a number of institutional separately managed accounts that totaled more than $400 million of committed capital. Mosaic continues to manage assets that continue to be held in those accounts.
The Capital Company of America/Nomura Asset Capital – Founder & CEO
CCA/NAC was a partnership between Nomura Securities (then the world’s largest financial concern) and Ethan and was designed to fill the historical void in the real estate financing market created by the crisis frequently referred to as the Savings & Loan Crisis. In the 6 years before Ethan’s departure in 1998 that resulted from leadership conflicts, CCA/NACC literally created the CMBS industry and was the nation’s leading real estate lender, producing massive returns for its investor – Nomura Securities.
CBRE Capital Partners – Founder and President
CBRE CP, a partnership between CB Richard Ellis and Ethan, was launched as an opportunistic debt investor in response to the GFC in 2008, aiming to capitalize upon that severe liquidity crisis and the massive correction in real estate pricing that ensued. Before leaving the firm due to an executive reshuffling in 2012, Ethan and his team had invested approximately $800MM on behalf on institutional and high net worth investors and producing returns that exceeded its targets.
Morgan Stanley – Principal and Founder of the firm’s structured mortgage credit business
Ethan joined Morgan Stanley after a two-year stint at Drexel Burnham Lambert where he was one of the firm’s earliest mortgage traders, to create and lead the firm’s mortgage credit trading, finance, and sales businesses. This business became the dominant profit-maker for the firm for many years after Ethan’s departure, under the leadership of individuals handpicked and trained by him.
Career Hilights
Mosaic Real Estate Investors – Founder & Managing Partner
Mosaic was founded in 2015 focused on real estate structured finance investments. It’s flagship fund, Mosaic Real Estate Credit (“MREC”) was an open-ended fund that at its peak represented more than 100 independent Registered Investment Advisors representing approximately 1800 individual investors who in total committed $550 million and was growing rapidly until the Covid-19 pandemic hit. Fearing that the pandemic might have a harmful impact both on the valuations, cash flows, and liquidity of its portfolio, MREC’s management sought to produce liquidity for its investors. This culminated in a merger of the fund with the publicly traded mortgage REIT Ready Capital (NYSE: RC) that closed in March of 2022. While the pandemic’s impact proved to be extremely harmful to the entire industry, the merger did provide MREC investors with instant liquidity at market peak pricing for more than 80% of NAV. Mosaic also managed a number of institutional separately managed accounts that totaled more than $400 million of committed capital. Mosaic continues to manage assets that continue to be held in those accounts.
CBRE Capital Partners – Founder and President
CBRE CP, a partnership between CB Richard Ellis and Ethan, was launched as an opportunistic debt investor in response to the GFC in 2008, aiming to capitalize upon that severe liquidity crisis and the massive correction in real estate pricing that ensued. Before leaving the firm due to an executive reshuffling in 2012, Ethan and his team had invested approximately $800MM on behalf on institutional and high net worth investors and producing returns that exceeded its targets.
The Capital Company of America/Nomura Asset Capital – Founder & CEO
CCA/NAC was a partnership between Nomura Securities (then the world’s largest financial concern) and Ethan and was designed to fill the historical void in the real estate financing market created by the crisis frequently referred to as the Savings & Loan Crisis. In the 6 years before Ethan’s departure in 1998 that resulted from leadership conflicts, CCA/NACC literally created the CMBS industry and was the nation’s leading real estate lender, producing massive returns for its investor – Nomura Securities.
Morgan Stanley – Principal and Founder of the firm’s structured mortgage credit business
Ethan joined Morgan Stanley after a two-year stint at Drexel Burnham Lambert where he was one of the firm’s earliest mortgage traders, to create and lead the firm’s mortgage credit trading, finance, and sales businesses. This business became the dominant profit-maker for the firm for many years after Ethan’s departure, under the leadership of individuals handpicked and trained by him.