Ethan Penner to Take the Stage for Keynote Interview at Connect Los Angeles

He’s been called a Wall Street legend and the father of CMBS, and now he’s a published author as well. At the upcoming Connect Los Angeles, scheduled for May 1 at the Intercontinental Los Angeles Downtown, Mosaic Real Estate Investors founder Ethan Penner will take the stage for a one-on-one keynote interview. Joining Penner will be Matthew A. Wyman, partner and chairperson at Cox Castle & Nicholson, who will serve as moderator. In advance of the conversation, Connect CRE sounded out Penner for insights tying in with the recently published Greatness is a Choice.

Q: You’re considered to be “the father of CMBS.” How did the level of critical thinking you describe in Greatness is a Choice drive your understanding of CMBS’ potential? 

A: I’ve always focused on big pictures, how systems function and how they break down. When they break down there are inevitably major needs that go unmet, and it is in meeting those needs that one can provide true value and be appropriately rewarded.

The late 1980s saw an excessive amount of capital chasing real estate. This led assets to achieve super high valuation levels. Inevitably, in these sorts of moments something changes the prevailing sentiment from bullish to bearish, which could be financial market regulation as was the case in the early 1990s, rates moving higher as was the case these past few years, or just sellers taking profits. By the early 1990’s, there was literally not a lender in sight, as the entire pool of lenders, most all of whom were regulated and thus all answered to the same pressures, went cold in unison like a light switch going off.

Having spent the first decade of my career being one of the pioneers of securitizing residential mortgages, it was obvious to me that the solution to the real estate capital access problem lay in applying that same process of introducing a new and giant pool of capital from the bond market to the commercial real estate industry. In the end, I’d say that this experience relied upon having a combination of attributes including a heightened level of awareness, cross-industry discipline, and a fair dose of courage and self-confidence to pursue a path that had never been before and where great skepticism lay.

Q: In our work lives, we’re often expected to compartmentalize, with work responsibilities separate from efforts at personal growth. How does a focus on growth make one more productive, and how does a focus on values contribute to this? 

A: I am not sure I can address this question exactly as it is being asked, because it presumes that I believe that better people are more productive too. I do not necessarily believe this to be 100% the case. We’ve all seen people achieve extreme productivity while living very imbalanced lives, and imbalance is not necessarily a quality that most people would consider a foundation for personal improvement. We have also seen and heard legends of many great achievers with mercurial and prickly ways of relating to others, who were not necessarily viewed as having grown much as human beings.

But there is nuance to this. An extreme producer in a field relying heavily upon individual effort, such as basketball player for example, or a startup entrepreneurship, an imbalanced and prickly person can still achieve great productivity. Yet, that is very different than an effort that is more dependent upon a team. In those circumstances, while a heroic effort is still required to produce outsized results, the skill of forming and leading the right team of people can produce interesting synergies that can take the place of a massive individual effort to produce great outcomes. I greatly favor those endeavors, as I enjoy the camaraderie and learning and growing that are more abundantly available in collaborations with partners than solo journeys.

Q: Although you delve into this in the book, can you summarize the importance of interconnectivity among everything from economics to ideology and nature? 

A: Human beings and how they interact with one another and with the world is at the foundation of everything. Understanding what inspires behavior is the key to being successful in all aspects of life, including business and personal. It also helps us see the world much more clearly.

Q: The book distills a lifetime of insights and experience. What advice would you provide to someone at the beginning of his or her adulthood on developing this wisdom? 

A: Enjoy the journey. Put in max effort always. Establish a world view and continually update it and refine it as you gather new information. Make sure that your chosen life path is consistent with that world view because if you’re swimming with the current, it’s a lot easier and more rewarding than against it. Embrace your unique self and don’t try to calibrate to please others. Take responsibility for all your mistakes and failures and be sure you learn something important from each one – these are your teachers.

Register to be there in person for the live Keynote Interview with Ethan Penner on May 1 at the 8th Annual Connect Los Angeles 2024.