How the University can buy property and where the money is from

The University's Real Estate Department was recently given permission by the Board of Regents to negotiate the price of property they wish to buy before the Board approves the purchase. The money that pays for the property is from the Regents Endowment Fund. This pot of money also goes towards scholarships.

“It's still the same process, it just expedites trying to identify the funding source because the Regents authorized (us) to use that source subject to their approval on each case,” Thomas Neale said – Director of UNM Real Estate.

The Regents Endowment is one of three endowments the Board controls. Each fund has specific stipulations of what the money can go towards. Amongst others, the Regents Endowment can go towards scholarships and property acquisition.

Regents Policy 7.19, which lists the stipulations of what the endowment can be used for, reads:

“(1) Enhance the recruitment and retention of outstanding faculty, staff and students; (2) contribute to the merit-based scholarship program of the University, including the Regents' Scholars Program; (3) support the development of real estate; (4) provide for the University President's Advancement Program; (5) reward outstanding performance of the SAM Financial Services Center Investment Management Program to be used for improvements to and upgrade of the facilities, equipment, software and special projects for the Finance Services Center."

For fiscal year 2023, the Regents Endowment spent $1,761,929. Between the three funds, $6,377,561 was spent; 70% went towards Institutional Scholarships and Student Support, 19% President's Initiatives (i.e. the University’s Grand Challenges) and Advancement, 9% on faculty support and 2% on government relations and speakers.

Historically, there have been a few requests for buying property with the Endowment. In 2005/2006, $1,888,233 was spent on properties; in 2012/2013, $1,100,000 was spent on a baseball field; in 2014/2015, $761,918 was spent on Innovate ABQ, the development with Lobo Rainforest.

“I would say on average, maybe one to two properties a year (are bought with University funds). But that can vary year by year depending on the need. Recently, at the request of our health system, we've looked at a number of sites for clinics around the metropolitan area,” Neale said.

The Real Estate team is bound by market value when buying a property, Neale said, and they cannot purchase a property that is above the market value cost. The money can be pulled from either extra revenue that the endowment grew or from the original sum of money used to create the endowment, according to Cinnamon Blair – University Communication and Marketing officer. There are stipulations about the approval in their contracts.

“In our purchase and sale agreement, it's a contract to buy the property. All the terms are agreed on by the buyer and the seller. All of our contracts have a contingency that closing is contingent upon the Regents of the University of Mexico approval, the New Mexico Higher Education Department approval and then the New Mexico State Board of Finance,” Neale said.

The University is seeking to buy more property around campus – some that may not have been possible to purchase before the approval to negotiate because of the extended timeline and others vying for the land.

“Typically these houses in that area are (for) more long-term strategic purposes. We use this on an interim basis and you'll see a sprinkling of University programs in some of these former houses,” Neale said.

Maddie Pukite is the editor-in-chief at the Daily Lobo. They can be contacted at editorinchief@dailylobo.com on Twitter @maddogpukite

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