The Utah State Retirement Fund is close to reaching its maximum in real estate investment, according to the fund's assistant real estate officer, DeVon W. Olson.
Pension funds traditionally invest between 10 percent and 15 percent of their assets in real estate, and the Utah fund has nearly reached that point, Olson told members of the Utah Chapter of the National Association of Industrial and Office Parks.Olson said fund officials started investing in real estate 12 years ago but now are trying to get rid of their vacant property investments. He said the fund is investing more money in retail, industrial and residential properties.
Another speaker was David Farnsworth, vice president and manager of the income property department for Key Bank of Utah, who said the bank is looking for good investments in the $250,000 to $8 million range such as shopping centers, apartment buildings and other general-use projects.
Farnsworth said banks don't compete with pension funds or venture funds and look for a cash commitment of between 10 percent and 25 percent from the borrower to ensure a good loan.
A third speaker was Don Ayers, vice president and regional manager of John Alden Asset Management Co., who said his company is willing to invest in Utah, even though it may not be the strongest market at this time.
When asked about the economic climate of the country, Ayers said it will take a few months for people to decide about the Bush administration. He said interest rates in treasury bills will peak at 10 percent in a few months, but if inflation continues, "look out."