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The Alaska Permanent Fund Corp. has sold its interest in the Plaza Port West shopping mall in Ketchikan, its only real estate investment property in the state.

The sale of the $6 million property was handled by the Carlton Smith Co. of Juneau.

The permanent fund owns 13 percent of the property, which was managed by Kennedy Associates, a Seattle-based real estate firm, on behalf of the permanent fund and several other investors.

With the sale of Plaza Port West, the permanent fund's $3.7 billion real estate portfolio now has no holdings in Alaska, with the exception of the Goldbelt building where its own offices are located.

The corporation's executive director, Mike Burns, said it neither specifically seeks out or bars investments in Alaska by its handful of real estate management firms.

"We're neutral on it," he said.

"Investments in-state have to meet the same criteria as out-of-state; there's no incentive or prohibition" on investing in Alaska, he said.

The lack of permanent fund investments in Alaska likely stems from the state's small size relative to the amount of money the fund is investing, Burns said. Anchorage is the only community in the state likely to have many properties its investment managers might even look at, he said.

The story is the same at the Alaska Department of Revenue, where the Alaska Retirement Management Board manages billions of real estate investments on behalf of public employees and teachers.

"We're free to invest in Alaska, or not invest, as the case may be," said Gary Bader, chief investment officer for the Department of Revenue.

There have been informal suggestions in the past that state money be invested in Alaska properties, but Bader said the Alaska Retirement Management Board policies don't allow the state to get lower returns on a property just because it is in Alaska, he said.

"I don't think that's what the public expects from the permanent fund or the pension funds," Bader said.

Both Bader and Burns said their real estate managers occasionally look at investment properties in Alaska, but other than the Juneau and Ketchikan properties, have not purchased any.

The buyer for the Plaza Port West mall was Rob and Debbie Hill, Smith said.

The sale closed last week. The Hills are experienced commercial property owners in Seattle who are making their first Alaska investment, he said. They own about 150,000 square feet of retail space in downtown Seattle.

The 88,000-square-foot mall is one of the top 10 property taxpayers in Ketchikan.

• Contact reporter Pat Forgeyat 523-2250 or e-mail patrick.forgey@juneauempire.com.