Ethan Penner, the pioneer of commercial mortgage-backed securities, has all but declared he was running for governor of the Golden State.
The nonpartisan CEO of Calabasas-based Mosaic Real Estate Investments took aim at Gov. Gavin Newsom while outlining a collaborative approach to addressing the dichotomy of California as the state with the most wealth alongside the highest number of homeless residents, according to a You Tube interview with The Real Deal.
Amir Korangy, founder and chairman of the TRD, recently joined the gubernatorial hopeful for the latest episode of “Coffee Talk.”
“I am attracted to desperate situations,” Penner, 64, in a gray suit jacket and open blue button-down shirt, said during the interview. “I think California is in [a] desperate situation today. It suffers from incredible, incredible mismanagement.
“I love a good challenge. I love helping people. And I feel that (office) circles a lot of those needs for me.”
During the half-hour chat, Korangy and Penner went over his career as a real estate financing firebrand and his approach, if elected governor, to tackling problems in California — from wildfire prevention to rebuilding Los Angeles to stemming an exodus of job creators to other states.
Penner is a one-time whiz kid who started his career in finance i 1983 on the “lowest job on the totem pole” as a savings and loan trainee in Huntington Beach, and seven years later was at “the top of the totem pole” as executive with Morgan Stanley in New York, where he founded its non-agency mortgage trading and finance business.
He later became known as the “father of CMBS” at Nomura Securities, where in the 1990s he led the development of packaging commercial property mortgages into bonds, or financial instruments known as CMBS. Last year, he launched a $1 billion office mortgage REIT.
It was in April when the father of five told Bloomberg he was considering a run for California governor next year.
His condition: to limit his personal spending to $39,200, the limit for individual contributions, because he objects to candidates who employ their wealth to try to buy their way into public office. Penner also steered clear of a political party affiliation, explicitly ruling out a run as Democrat. He also has vowed not to use his personal fortune to finance a run, but instead stick to the limit of $39,200 placed on individual political contributors in California.
Candidates have until no later than March to finalize their paperwork ahead of the June 2, 2026 primary.
It’s already a crowded field. Declared Democratic candidates include former Los Angeles Mayor Antonio Villaraigosa, former Rep. Katie Porter, former U.S. Secretary of Health and Human Services Xavier Becerra, former State Controller Betty Yee and Lieutenant Governor Eleni Kounalakis, among others — with former VIce President Kamala Harris also a possibility.
Riverside County Sheriff Chad Bianco was the first major Republican to toss his hat in the ring.
As governor, Penner said he’d work to reduce regulations, cut taxes and better the state’s business climate. His secret sauce, he told Korangy: “teaching and selling.”
“I’ve been teaching and selling my whole career,” said Penner, author of “Greatness is a Choice” and an adjunct professor at Pepperdine’s Graziadio Business School and USC’s Marshall School of Business. “I’ve been creating new products, trying to persuade people of their merit.
“So selling and teaching and winning a coalition is, I think, the way to bring about sustained and meaningful change.”
Penner took special aim at Newsom, who he said watched the state’s three largest fires burn tens of thousands of homes on his watch without ever having convened a panel of wildfire experts to determine how to prevent them.
He pointed to Austria, with cities surrounded by forests, which wrote laws and real estate zoning to keep homes and people out of harm’s way.
“They’ve successfully never had anything like we’ve had in California, because they actually pay attention … they actually care,” he told The Real Deal. “People in government in Austria go, ‘Gee, I have a job. My job is to make sure that my citizens have a decent quality of life and don’t suffer disasters.’
“Our governor doesn’t think that way, and our government doesn’t think that way.”
He said California was ill prepared, and Los Angeles was ill prepared, for the wildfires that torched 12,000 homes — with inadequate insurance affecting mortgage loans and the ability to buy homes in the state. And in five months, local governments have issued four permits to allow residents to rebuild their homes.
Penner spoke of the state’s infamous traffic, and suggested a freeway tunnel system by Elon Musk’s Boring Company. He spoke of a threat to jobs by artificial intelligence, suggesting replacement work must lean into “humanness” — and what people can do better than robots.
And he spoke of a five-year exodus of state “producers,” taking jobs and taxes to states like Texas and Florida — the beginning of a “death spiral” for the world’s fourth largest economy.
“We have to reverse the trend — and we don’t have a lot of time,” he told Korangy. “So when you ask me why I’m running, I actually don’t think California can survive four more years of the kind of leadership it’s suffered for the last 20 or 25 years.”