Alaska Fund Real Estate Pivot Targets Office and Retail Selloff

Alaska Fund shifts real estate strategy, selling office and retail assets to invest in multifamily and industrial properties.

June 6, 2025

Nina Dale

The Alaska Permanent Fund, worth $81B, plans to sell office and retail properties to buy more multifamily and industrial real estate.
The fund is marketing its stakes in Tysons Corner Center mall near D.C. and the 44-story 299 Park Ave. office tower in NYC.
Weak office performance weighed on the fund’s Q1 returns, prompting a move toward more stable asset types.

Key Takeaways

Fund Reworks Real Estate Portfolio

According to Bisnow, the Alaska Permanent Fund is rebalancing its real estate holdings. Instead of growing its portfolio, the fund will keep its real estate share at 10% while changing what it owns. It aims to reduce risk by moving money out of office and retail spaces and into sectors with stronger demand, like housing and logistics.

High-Profile Properties for Sale

The fund is selling its 50% share in two large properties:

Tysons Corner Center, a 1.8M SF mall near Washington, D.C., has anchor stores like Nordstrom and Macy’s. In December 2023, the owners refinanced the mall with a $710M loan at 6.6% interest. A recent appraisal valued the property at $1.8B. The owners are also planning to turn a former Lord & Taylor store into housing or offices.
299 Park Avenue in New York City is a 44-story, 1.3M SF office building. It’s fully leased, with major tenants like Capital One and UBS. In February, the owners secured a $500M loan backed by the property. An appraisal from late 2024 valued the building at $1.1B.

Returns and Strategy

The fund earned a 4.55% return in the first quarter, slightly above its target. However, office property losses pulled down results. Fund managers want to avoid more risk from troubled office markets by shifting investments into more stable areas.

Since 2020, the fund has also moved some money from REITs into fixed-income assets. At the May board meeting, investment leaders said REITs offer liquidity but also add more ups and downs to the portfolio.

The Bigger Picture

This move fits a larger trend. Many big investors are stepping back from struggling offices and malls and looking instead at housing and warehouses. The Alaska Permanent Fund’s shift shows how even long-term investors are rethinking what kinds of real estate make the most sense today.