Trust says it will divest commercial real-estate portfolio after audit findings; sales underway

Alaska Mental Health Trust officials told the joint House and Senate State Affairs Committees on April 3 that the trust is divesting a commercial real-estate portfolio following prior Legislative Budget and Audit reviews.

Representative [name recorded in transcript] referenced the 2017 Legislative Budget and Audit review and asked what had changed since that audit. Mary Wilson, the trust chief executive officer, and Jesse Warner, executive director of the Trust Land Office, described trustee actions to exit direct commercial real-estate holdings.

Wilson said trustees concluded some years ago that divesting the commercial portfolio was the best course and that the process was underway: two properties have been sold and four more remain to be sold. She said the trustees decided to move management of that portfolio into the trust office with consultant oversight and to sell remaining properties over the coming years.

Warner added that money used to purchase those commercial real-estate assets had been restored to principal: “The money that was used to purchase those commercial real estate assets, from principal, the trustees in between this the 2017 and this time, used income to reinstate that funding that came out of principle. So that has been put back into the corpus,” he said on the record.

Lawmakers asked for clarification about the scale of the holdings and for documentation; trust officials said they would follow up with details. No formal committee action or new legislative directives were taken during the hearing.

The exchange reflects continued legislative interest in how trust investments, land sales and noncash assets are managed and how those decisions affect the trust corpus available for beneficiary grants and programs.