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CBRE Capital’s Penner steps down

The head of the Los Angeles-based real estate firm’s debt investment business officially left his post last week, which will trigger a key-man clause in the platform’s two open-ended funds.

Ethan Penner, president and founder of CBRE Capital Partners, has parted ways with the firm as a result of reported friction with senior management at CBRE Global Investors, of which CBRE Capital Partners is the global real estate finance platform.

“I’m a little more entrepreneurial than perhaps they are,” Penner told PERE. “The cultural fit between me and some of the people there probably wasn’t ideal, and I suppose that caused a bit of a schism.” He noted that he and senior management at CBRE Global Investors had been trying for months to resolve their differences on how to run the real estate finance business, but they failed to reach an agreement.

In a statement, a CBRE spokeswoman confirmed that Penner “has wound down his day-to-day executive involvement in CBRE Capital Partners, effective March 31, in order to pursue new entrepreneurial opportunities…Ethan will remain an advisor to the funds for the next six months to facilitate a smooth transition, and he will retain a substantial co-investment in the funds.”

“I built the foundation of a great business,” said Penner. But “the time for me to move on is now.” He added that he is working on a new business venture that he expects to announce in the coming months.

Penner’s departure will trigger a key-man clause in CBRE Capital Partners’ two open-ended real estate debt funds: CBRE Capital Partners US I, which focuses on low-risk investments, and CBRE Capital Partners US Special Situations I, which offers high-risk returns. The vehicles so far have raised an initial pool of $550 million, which is now largely invested. Investors will now have a 90-day period to decide whether to move into an R share format, effectively a liquidating trust, where shares can be bought out by incoming investors. During that period, the business will not be permitted to make any new investments.

A 28-year real estate veteran, Penner launched CBRE Capital Partners in 2008 with chief operating officer Frank Scavone, as CBRE sought to take advantage of the dislocation in the financial markets. Scavone has succeeded Penner as the head of the real estate finance business, which is based in New York.

Penner was considered a pioneer in the commercial mortgage-backed securities market in the 1990s and has a history of launching real estate finance companies, including Capital America, which he started in 1993 with the backing of Nomura Securities, then the largest real estate lender in the US. He later formed Pacific Star with co-founders David Walker and Aria Mehrabi in June 2003. Prior to joining CBRE, he was a principal at Lubert-Adler Real Estate, where he was responsible for sourcing and underwriting new investments.