'Father Of CMBS' Ethan Penner Launches $1B Office Mortgage REIT
Two longstanding CRE pros known for seeking out distressed opportunities, Ethan Penner and Chad Carpenter, have formed a new entity called Reven Office REIT. The REIT's goal is to raise $1B to offer loans to office owners and invest in distressed office debt and discounted properties.
The new mortgage REIT is seeking $100M from a lead investor and $900M through a “blind pool” IPO. Blind pools typically raise funds without a specific stated investment goal, meaning the investor has broad discretion to make investments.
Penner, who will be Reven Office REIT’s chairman, is credited with creating the CMBS market in the 1990s during his time with Noruma Securities. In 2015, he founded Mosaic Real Estate Investors. Carpenter, who will be the new entity's CEO, is the founder of Reven Capital and was chairman of Reven Housing REIT, which Pacific Oak Strategic Opportunity REIT acquired for nearly $57M.
The formation of Reven Office REIT comes during a period of capital shortages for office owners, which are facing a particularly steep wall of maturities.
Nearly $150B of mortgages associated with U.S. office buildings are maturing by the end of this year, and just over $300B will mature by the end of 2026, CommercialEdge reported in October. Maturing loans are concentrated in the largest markets, led by Manhattan, as well as in other urban areas, and in Class-A assets.
“We see today tremendous dislocation in the commercial real estate world, most primarily in office,” Penner told Bloomberg. “Whatever lenders are out there won’t touch office with a 10-foot pole.
