Letter to the editor: Not enough knowledge

Not enough knowledge

Received July 27

It was an eye-opener to see the smiling pictures of “Butch” Otter, Ben Ysursa, Lawrence Wasden, Brandon Woolf and Tom Luna proudly touting their “efficient management” of our natural resources on the July 26 Opinions Page.

This group oversees Idaho’s endowment trust land and funds to the tune of $330 million. The thing that troubled me was the failure to note that among investments made, the Land Board, through a separate “Endowment Fund Investment Board,” has invested in commercial real estate holdings with state funds. In visiting with a state senator, I asked if board members understood commercial real estate, and he acknowledged they do not have the qualifications to underwrite commercial real estate investments. Having been in commercial real estate finance for nearly four decades, I can state unequivocally that intense statistical data is necessary to accumulate enough information to know if a commercial property can function and generate an anticipated cash flow.

Every sophisticated commercial property investor mandates the use of an independent MAI appraisal on every property considered. Further, underwriting includes analysis of five-year operating statements, and personal guarantees of leases in many instances.

I feel Idaho is in direct conflict with private industry in purchasing commercial properties and that they fail to recognize the downward trend of real estate nationwide, which will jeopardize all real estate holdings.

We have a precipitous economy, and it mandates sophisticated investing and complete transparency in every dealing. A famous quote says it all, “Be wise, what can I say more?”

(Word count: 250)

TOM KENNELLY

Rexburg

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