Bio
Ethan Penner is a founder of Mosaic Real Estate and its Managing Partner. He is a recognized pioneer in the fields of real estate and finance with a 30-year career marked by filling voids and responding to unseen or poorly understood opportunities. Most consequently, he is credited with being the primary driver in the creation of the Commercial Mortgage-Backed Securities market for which he received broad recognition including being named one of the U.S. Real Estate Industry’s 100 icons of the 20th century. In 2011, Real Estate Forum voted him one of the Real Estate Industry’s 65 living legends in their 65th anniversary issue.
In 2008, Penner founded and served as President of CBRE Capital Partners, a real estate debt investment platform which successfully raised and managed over $600 million from institutional and high net worth investors. CBRE Capital Partners exited all of its investments in 2014 and the beginning of 2015.
Ethan is also committed to improving the lives of others and enhancing awareness and does so in a number of ways including teaching – he is an adjunct professor at Graziadio School of Business at Pepperdine University; writing – he maintains a weekly blog and has had many articles published in a variety of publications including the Wall Street Journal, the Wharton Real Estate Review and the Institutional Real Estate Investor; public speaking – he is a frequent featured speaker at industry conferences and universities; philanthropy – in 1996 he founded the Walt Frazier Youth Foundation which provided internships to teenagers at major U.S. corporations in New York City, and has been on numerous boards including that of The League, which had a competition-based, in-school community service model, KIND, which is dedicated to bringing education and opportunity to woman, and The Simon Wiesenthal Center, which is dedicated to enhancing awareness to combat hate; and fitness – he is the founder and board member of Fitwall, LLC, a company aimed at revolutionizing the exercise industry through its patented Fitwall product.
He recently wrote and published Greatness is a Choice, his book about his life and philosophy with several important messages, which will be discussed in this podcast episode.
Ethan is married to Marisol Penner, a former professional athlete and native of Venezuela, and they have five children and reside in Los Angeles.
Show Notes
- The Origins of the CMBS Industry (00:09:00)
- Ethan Penner discusses how he started the CMBS industry in the early 1990s after seeing the devastation of the S&L crisis and the lack of capital in the banking industry.
- The rating agencies’ skepticism (00:14:18)
- Ethan talks about how he convinced the rating agencies to overcome their fear of real estate and rate his investments.
- Persuading the rating agencies (00:15:16)
- He shares a conversation he had with the head of a rating agency, where he explains the logic of his real estate investments and convinces them to rate office investments.
- The early years of success (00:19:16)
- Discusses how his real estate financing business thrived in its early years, with no competition and the ability to charge high rates, making millions in the process.
- Hardships of Ancestors (00:23:51)
- Discussion about the hardships faced by Ethan’s ancestors, including immigrating to the US and the challenges they encountered.
- Immigrant Mindset (00:25:20)
- Comparison of his grandparents’ immigrant mindset to today’s immigrant situation, emphasizes the determination to start anew and the absence of entitlement.
- Character Building (00:29:01)
- Ethan reflects on how growing up in a challenging environment, and taking on adult responsibilities at a young age shaped his character.
- The California Dream (00:35:00)
- Discussion about the appeal of California and the decision to adopt a California neutral accent.
- Learning in the Moment (00:36:17)
- Reflection on the valuable lessons learned as a loan officer trainee and the impact of those lessons on Ethan’s career.
- The Purpose of Life (00:40:06)
- Exploration of the importance of learning and growth in one’s journey, and the misconception of wealth accumulation as the ultimate goal in life.
- The Impermanence of Market Losses (00:47:53)
- Discussion about the financial markets and the panic caused by foreign investors, specifically Japanese investors, during times of market uncertainty.
- Building a New Business with Nomura’s Backing (00:49:04)
- Explanation of how he started a commercial real estate business with the financial backing of Nomura, a Japanese company, and the success they achieved.
- Betrayal and Self-Reflection (00:50:10)
- Ethan recounts being fired by a colleague and the emotional turmoil that followed, including feelings of betrayal and self-pity. They discuss the importance of taking responsibility for one’s actions and growing from difficult experiences.
- Moving to the Big Island of Hawaii (00:59:52)
- Ethan discusses his decision to move to Hawaii for three years to disconnect from everyone and rebuild himself.
- Returning to Work in 2006 (01:01:30)
- Ethan Penner talks about coming back to work in 2006 during a bull market and how being smart is an obstacle in a bull market.
- Joining CBRE and Leaving (01:05:31)
- Ethan Penner shares his experience joining CBRE, creating an entrepreneurial island, and ultimately leaving the company due to management changes.
- The volatility of the real estate business (01:12:31)
- Discusses the volatility of the real estate business, comparing the CMBS business with the lower beta life insurance lending business.
- Misunderstanding volatility in the real estate industry (01:13:19)
- Explains the misconception and misunderstanding of volatility in the real estate industry, using the example of the fluctuating price of an iPhone.
- Real estate market before price discovery (01:15:47)
- Explores the lack of price discovery in the real estate market before the advent of REITs and CMBS, and how it affected the perception of volatility in the industry.
- The Future of Real Estate (01:23:50)
- Discussion on how real estate is undergoing significant changes and the importance of thinking philosophically and understanding human behavior in the industry.
- Understanding Inflation (01:25:56)
- Explanation of the concept of inflation, its relationship with interest rates, and the impact of the Federal Reserve’s actions on the market.
- Teaching Real Estate (01:30:40)
- Ethan’s journey into teaching real estate, his teaching philosophy, and the unique approach he takes in his classes to create engaging and interactive learning experiences.
- The Origins of the Book (01:39:15)
- Ethan discusses his motivation for writing the book and the idea of creating a family heirloom of ideas and experiences.
- The Evolution of the Book (01:41:07)
- Ethan shares the process of writing the book, from writing 100 pages in four hours to publishing it and receiving positive feedback from readers.
- Balancing Humility and Confidence (01:44:28)
- Ethan talks about the concept of duality and the fine line between humility and arrogance, emphasizing the importance of balancing opposing ideas to be a fulfilled human being.
- The missed opportunity with Gary Winnick (01:49:23)
- Ethan shares a missed opportunity he had with Gary Winnick, who had a successful career in finance and approached Ethan with a plan to lay undersea cables. Ethan dismissed the opportunity without giving it much thought, only to later realize the potential success of the venture.
- The risks of success and aging (01:54:00)
- Ethan reflects on the risks of success and aging, mentioning how some people become closed off and stop learning and growing. He shares the importance of staying open to change and being inquisitive, highlighting the compliments he has received for his openness to change.
- Favorite books and authors (01:57:30)
- Ethan discusses his favorite books and authors, mentioning Hermann Hesse as someone he loves and admires. He specifically praises Hesse’s book “Siddhartha” as the greatest book he has ever read, explaining how his understanding of the book has evolved over time. He also mentions George Orwell as an author he admires.
- The impact of George Orwell’s books (02:00:08)
- Discussion about George Orwell‘s books being distributed through word of mouth and the hope that Ethan Penner’s own book will be similarly valued in the future.
- The importance of Ayn Rand’s books (02:01:23)
- Recognition of Ayn Rand‘s storytelling abilities and the recommendation of her books, despite their controversial nature.
- Fulfilling potential and the concept of greatness (02:07:10)
- Exploration of the mindset of fulfilling one’s potential and redefining greatness as showing up, giving 100%, and bringing one’s best self to each moment.
- Ripple Effect of impact on the world (2:09:00)
- Ethan discusses the compounding effect of putting something in the world in a small way then grows significantly. Citing an example of overtipping a waitress who will pass on a kinder and happier state of mind.
- Rick from Casablanca (02:14:00)
- Ethan Penner discusses how the fictitious character Rick from Casablanca is his idol and why he admires him for his humility, kindness, and selflessness.
- Julius Erving (02:15:49)
- Ethan Penner expresses his admiration for Julius Erving, describing him as a generous, kind, and chivalrous person, and talks about their friendship and Erving’s impact on basketball.
- Defining Success and Greatness (02:20:31)
- Ethan Penner shares his evolving definition of success and greatness, emphasizing the importance of personal growth, bringing your best to each moment, and the fulfillment that comes from living an aware and intentional life.
- The channeling of energy and wisdom (02:25:30)
- Ethan discusses his belief that innovation and knowledge come from external sources and that humans can become conduits for universal wisdom.
- The importance of authenticity in communication (02:27:03)
- Ethan shares a story about his experience with public speaking and how he learned the value of being authentic and reacting organically to others.
- Living aware and enjoying life (02:33:23)
- Ethan suggests that people should live aware, treasure each moment, and surround themselves with uplifting individuals to enjoy life fully.
- Paying Your Dues (2:34:00)
- Ethan believes that the journey of paying dues was worthwhile to him
- The Hopelessness in New York (02:38:36)
- Discussion about the high percentage of homeless and impoverished students in the New York public school system and the challenges it poses for the future of the city.
- Lack of Trust in Government (02:41:20)
- Exploration of the mistake of placing too much trust in government and the consequences of poorly invested trust without proper checks and balances.
- Belief in a Better Tomorrow (02:43:00)
- Expressing optimism in the American system and the belief that society will overcome challenges by working together to create a better future.
