Report says a prime piece of Permanent Fund real estate could be sold

Posted: Tuesday, January 15, 2002

FAIRBANKS (AP) -- A New York development company may be interested in buying the Alaska Permanent Fund's flagship real estate property -- the Tysons Corner Center mall just outside Washington, D.C.

A report in the Washington Post quoted a Tysons property manager as saying that the center could be sold by April. A spokesman for the Alaska Permanent Fund Corp. wouldn't comment.

''We're just not going to say anything about it while we're in the middle of negotiations, if we are,'' Jim Kelly told the Fairbanks Daily News-Miner.

The fund started investing in the property in 1985, Kelly said. It has been majority owner since 1997 and now owns 57 percent of the center. Several pension funds are the other major owners.

The fund values all its real estate property at about $2.5 billion, but Kelly said he couldn't discuss the current value of the Tysons property or how much the $26 billion permanent fund has invested in it.

The Washington Post story quoted sources who put the value of the entire property at between $515 million and $525 million. The prospective purchaser is Wilmorite Inc., of Rochester, N.Y., the Post reported. A phone call Monday to the company was not returned.

L&B Realty manages the property. Daniel Plumlee, president of L&B Realty Advisors Inc., was quoted as saying that the property could have a new owner by April.

Tysons is the eighth-largest mall in the country. The 2.1-million-square-foot building sits at a central crossroads in Fairfax County, one of the wealthiest counties in the United States. The average household income within five miles is $122,264 per year, according to the mall's Web site.

Anchor tenants at Tysons include Bloomingdale's, Hecht's, JCPenney, Lord & Taylor, Nordstrom and L.L.Bean.

The Alaska Permanent Fund's real estate policy, approved in December 2000, states that such investments must produce a cash return of 7 percent or better annually, with a long-term return of 10 percent.

The corporation policy says it retains ''the right to sell the fund's interest in any equity real estate investment.''

The fund's November 2001 financial statement values the corporation's assets at $26 billion. In addition to the $2.5 billion worth of real estate, the corporation holds about $10 billion in bonds and $12.6 billion in stocks. The other billion is about half cash and half certificates of deposit, prepaid expenses and accounts receivable.

Earnings on investments from the fund are used to pay out a yearly dividend to every eligible Alaskan. Last year's dividend amounted to $1,850. In November, fund officials predicted next year's check would decline by about 12 percent because of weaker returns following the Sept. 11 terrorist attacks.

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