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Ethan Penner, CEO of Mosaic Real Estate Investors, sat down on March 7, 2023 with AFIRE CEO and podcast host Gunnar Branson, challenging conventional thinking based on what has worked on the past—and presenting practical insights about how investors can avoid thinking mistakes and navigate the more challenging aspects of the current (and coming) real estate cycle.

Ethan Penner joins Elizabeth Baker, Senior Event Producer at Bisnow along with Spencer Levy, Chairman of Americas Research, CBRE to discuss how to best invest in today’s volatile capital markets, as well as their predictions and outlook on the year to come. From an economic cycle disrupted to a new administration, our speakers are ready to point you to the hottest asset classes and incentives to make a profit and long-term investment in.

There are some sectors of the real estate market, such as suburban residential housing, that are doing just fine throughout this crisis. However, other areas are facing true existential risk. The value of commercial real estate in big cities is extremely uncertain due to the combination of the virus itself, potential migration out of cities, and the fact that so many people can work from home.

The financier who pioneered the use of commercial mortgage-backed securities is railing against a proposed federal bailout for the market he created, in part because it would help deep-pocketed landlords such as Tom Barrack’s Colony Capital Inc. Ethan Penner, who rose to prominence at Nomura Securities in the 1990s, argues in an essay that it’s “wrong, plain and simple”

MREC Management founder and Chief Investment Officer Ethan Penner says a proposed federal bailout for the commercial mortgage-backed securities market that favors specific borrowers “doesn’t make any sense at all.”

Ethan Penner, founder and managing partner at Mosaic Real Estate Investors, discusses the rules of investing in a market dislocation and how those rules have changed, how long this market dislocation may last and how to find attractive returns in a dislocated market environment.

As though the COVID crisis didn’t already have real estate investors on edge, combined with the tragic events in Minneapolis and subsequent protests, every investment decision is now being especially carefully scrutinized and second guessed. How long will protests last? What change will come as a result? What impacts will these two issues…

Lenders may be excused from feeling particularly stressed right now. In typical times they have often had to make difficult decisions but now they must also factor in an uncertain economy that is being driven by the virus.

For Ethan Penner, CEO and co-founder of Mosaic Real Estate Investors, each investment cycle has its own tempo. That knowledge can provide comfort in times of great upheaval. “For those of us who have been through a couple of [distressed cycles], you could figure where they are going to fall out,” Penner says. “They’re all different. But they also have a certain kind of market psychology that tends to resemble similar ones, and you could imagine how they’re going to play out.”

The coronavirus pandemic “will likely result in an unprecedented period of economic instability and recession that could last as long as three years,” according to Ethan Penner, co-founder and managing partner of Mosaic Real Estate Investors. Penner started originating commercial mortgages for securitization following the savings and loan bailout in the late 1980s, so he’s been through at least three economic cycles.

Economic uncertainty is changing lending practices, but that doesn’t mean there isn’t financing available for commercial real estate in Los Angeles. The trick, though, is finding that financing and getting the right terms. “Whatever underwriting people were using in January and February has clearly changed now,” said Kevin Shannon, co-head of capital markets at Newmark Knight Frank. “The loan terms — they are getting so dramatically different from what they were.

In violent storms, cracks in vessels suddenly reveal themselves. The same can be said for the nation’s commercial mortgage-backed securities market, as it faces a month of wider spreads and liquidity fears.  The pain points emerging are not a surprise to Mosaic Real Estate Investors’ Ethan Penner, who is credited with creating the CMBS market for commercial real estate some 30 years ago.  He thinks the whole system needs an update.

One would be willing to wager that Las Vegas, a town that lives and breathes hospitality, would be doomed in a total shutdown from a global pandemic. But, as it turns out, that’s a sucker bet. In a city that likes the gamble, a number of the major Las Vegas property owners and investors have been more conservative than in the past,

California, like many other states, has shut down its economy to slow the spread of the coronavirus, causing heightened volatility in every market and uncertainty as to how long it will last. Executive orders and unprecedented measures from state and local officials are mounting almost every day, adding layers of consequences to real estate markets and the rest of the economy.

Podcast…

A new housing development aimed at UC Merced students is expected to be the closest off-campus housing alternative for the ever-expanding university. Called “Merced Station,” the development at the corner of Yosemite Avenue and Lake Road is set to include 15 residential buildings with 270 units and 885 beds — plus retail and dining spaces.

I don’t think I’ll ever forget the Republican Presidential debate in 2008 when the moderator asked the candidates what they would do to “run the economy.” Senator McCain, the front-runner and eventual nominee gave a response typical for career politicians about how he would do this or that.

“As Ginger Rogers said, ‘I do everything that Fred Astaire does, backwards and in heels,’ ” said New York City Deputy Mayor Vicki Been, who opened Commercial Observer’s Women in Real Estate conference on Nov. 13.

There our powerful forces that influence how we think about things, and these forces often create and use terminology to advance their objectives. In the field of finance/investments this is certainly the case.

Join the Bisnow team on September 24th as we unpack everything you need to know about capital markets, the lending and investment climate, who’s buying and who’s selling, how to land your next deal, and how to weather future unpredictable factors.

When Ethan Penner and his team in 1992 started originating commercial mortgages with an eye toward securitizing them, few lenders were willing to do so. Times were so desperate that even the best operators had a hard time getting a mortgage for their properties…

Mosaic Real Estate Investors has provided $460 million in senior debt to BPM Real Estate Group for a massive planned mixed-use development called Block 216 in Downtown Portland, Ore., according to information from Mosaic.

Borrowers are taking advantage of the crowded debt fund space to find some pretty sweet deals on short-term bridge loans.

The $75 million Timbers Kiawah – Ocean Club & Residences is the South Carolina island’s first new residential oceanfront development in more than 30 years.

While lenders are cautious on hospitality deals, there are a range of options for borrowers looking to secure funding this year…

The Robert Green Company has reeled in a $212.2 million mortgage for construction of new lodging buildings that will augment an existing resort…

Ethan Penner is the Founder and Managing Partner of MREC Management, LLC. He is a recognized pioneer in the field of real estate finance with a 35-year career marked by filling voids and responding to unseen or poorly understood opportunities. Over his career he has been involved in more than $30 billion of mortgage originations.

CRE Finance Council is pleased to announce the Commercial Real Estate Finance Summit – West. The 2019 Summit – West will be held on May 7th and 8th and hosted at the Fairmont Miramar Hotel in Santa Monica, CA.

Ocean V, the hotel arm of developer PNK Group, has secured a $50.9 million loan to convert a dated Historic Core building into a 180-room business hotel Downtown. Mosaic Real Estate Investors provided the loan, arranged by HFF, Commercial Property Executive reported…

Mosaic Real Estate Credit listed as one of the Top Direct Lenders. The rankings reflect total dollar volume financed in calendar year 2017. The numbers encompass direct loans, credit lines, CMBS loans and other forms of direct investment in the commercial real estate industry.
The figures were collected via an online survey pushed out by NREI and reviews of company reports…

A run-down former hotel at one of downtown Sacramento’s seediest intersections is about to get a dramatic upscale remake. Construction starts this week on an 11-story boutique Hyatt Centric Hotel at the corner of 7th and L streets, to be built from the shell of the Marshall Hotel, a shuttered, century-old structure that has lived through downtown’s ups and downs…

That was one of my Granny’s favorite teachings. Granny wasn’t a wealthy woman or one who fancied expensive things, but she had a great clarity about the world. Observing today’s institutional investment industry, it seems as though many participants never got Granny’s message.

This week I read an article about a company that offers personal loans to folks who are seriously down and out. One of their strategies involves mailing checks for $2,000 to these people’s homes and if the check is cashed it activates a loan agreement that calls…

Ethan Penner, MREC Management Managing Partner discusses the U.S. 10-year treasury yields reaching 2.99%. Penner also sees a credit bubble in non-bank lending. He speaks with Betty Liu and Yvonne Man on “Bloomberg Daybreak: Asia.”

The heavily anticipated correction finally arrived and somehow it caught everyone by surprise. As is the case in any correction, the market seems fraught with panic and confusion. “How low will it go?” What is the cause? These are the questions being asked broadly…

In the midst of the financial crisis in late 2008 I recall feeling like things in the world would never again be the same. I remember wondering if the money printing called Quantitative Easing by the Federal Reserve Bank would cause even the average working person…

The Resolution Trust Corp.’s success with securitzation gave insight to a new rising star in the financial markets. Andy Stone, who worked as a mortgage trader under Lewis Ranieri at Salomon Brothers, saw potential in parlaying Ranieri’s success with residential mortgage-backed…

Should you be investing as if interest rates are about to bounce back to 7%? Historically speaking, how does the current lending environment compare to cycles of the past? How can politicians’ incentives impact your portfolio and investment strategy?

Ethan Penner, managing partner at Mosaic Real Estate Investors, discusses the common misunderstandings related to risk.

Since I graduated college nearly 35 years ago the yield on the 10-Year U.S. Treasury bond has declined from near 16% to today’s 2%-2.5% trading range level. This tells an important story. The massive decline in yields on all financial instruments during this period…

Ethan Penner, Mosaic Real Estate Investors, and Shari Olefson, The Carnegie Group founder, provide insight to the housing market.

On a recent trip to New York, I was confronted with a recurring question as I circulated among business associates and financial reporters over several days of meetings. They wanted to know, what did I think of the looming liquidity crisis in bonds? My reply was…

As a fund manager I find myself speaking to investors nearly daily.  This gives me a unique insight into the thought patterns of investors, what they value, what they fear, and their predilections. Not surprisingly, investors get very excited very easily, and often…