Crisis creates opportunity, and never before had Ethan Penner seen such opportunity as he did in 2007 and 2008 as he watched the events of the financial collapse unfold. The real estate professional had taken some time away from the industry to pursue other career options, but “I was tantalized by what I saw happening in the spring and summer of 2007 and I couldn’t miss out on being part of it,” he said when he spoke to students at Mays recently. “That’s really what drew me back into the business world. I saw the cracks in the system beginning to reveal themselves…I was able to anticipate what those cracks would ultimately bring about.”

Penner, who is widely recognized as a pioneer and innovator in real estate finance, joined CB Richard Ellis Investors in 2008 as an executive managing director and member of the firm’s executive committee.

“From an intellectual standpoint, we are living in an unbelievably challenging and interesting time,” said Penner. He spoke to MBA and master’s in real estate students about the economic ramifications of having so much national debt. “We are in an historic pickle right now as a country,” he said.


“From an intellectual standpoint, we are living in an unbelievably challenging and interesting time,” real estate pioneer Ethan Penner told a room full of Full-Time MBA students. (view more photos)

Though the government is trying to avoid calamity through quantitative easing, the burden of all that debt cannot be avoided. To his student audience, Penner said there’s not much need for concern. They’ll be fine. Those that will be hit hardest by these government “solutions” will be retirees, who are no longer building wealth but drawing on their reserves, which are losing value rapidly.

The financial crisis has deeply impacted commercial real estate, a highly leveraged industry. Equity has been wiped out in the U.S.—most property owners now owe more than their holdings are worth. That means everything in America is for sale at extremely low prices. “The whole market is for sale. The whole market is sitting in weak hands.”

Government missteps have only worsened the problems, in Penner’s opinion. Years ago, he wasn’t a political man. Today, he encourages young people to vote, because “Right now, the American dream is at risk.”

How does he think the government should fix the economy? By getting out of the way and letting the market fix itself. There are lumps that need to be taken before the economy can truly recover. We can’t keep living in this inflated state permanently, he says. However, politicians that are more concerned with reelection than long term financial health will not allow the recession to worsen, even if it would be in the best interest of the economy overall.

“I believe in the future of America. I believe that this flirtation with socialism will fail horribly—it already is—and I think we will have a renewed understanding in this country about what made America great in the first place. That will position us to be great going forward.”

Ethan Penner has 24 years of experience in the real estate sector. He earned a BA in finance from New York University. He is currently a board member of The League, an organization aimed at encouraging youth to engage in community service through the use of a competition-based model.