How much damage can a few basis points do?
See slides 4 and 5.
The State of Arizona’s pension fund is cutting its real estate allocation from 18% last year to 15% by 2026.
Twenty years ago, it was just 6%. A few years ago, the target was 20%.
6% → 20% → 15%
On a $60B base.
With projected growth, the move from 18% to 15% means ~$300M less in new real estate investments.
Where’s the capital going? Credit is a common target.
And if Arizona stops investing in real estate altogether, the $10B real estate portfolio could shrink to just $4.4B by 2028.
Takeaway: Tiny shifts in allocation can mean billions in foregone equity.
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