The Mormon Church Is Quietly Expanding Its Real Estate Empire

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1:46Carol Massar:It is one of the largest landowners in the United States, and it's been known to outbid Bill Gates for land, paying all cash. Who are you talking about? We're talking about the Mormon Church. It's the subject of today's big take from Natalie Wong, commercial real estate reporter for Bloomberg News. She and Anna Choi wrote the story. Natalie is here in our Bloomberg Interactive Brokers studio. Welcome, welcome. Thank you for having me. Congratulations on this. There's a huge piece. There's a lot of history here as well. I want to start with what you and the team found today about the Mormon church's real estate footprint.

2:27Sure. So really this project started because we had heard that the Mormons owned a lot of farmland, temples, obviously, but that they were starting to do more housing potentially and buy offices or luxury apartments. And we wanted to figure out exactly how much they owned across the U.S. And what we found out was they own a lot. They're one of the largest landowners. They own, from what we can track, which is a minimum of publicly available records, they own 2.4 million acres, roughly the same as two Delawares, and that has a property value assessed at just over$20 billion. But that is just a base amount.

3:01It's likely much higher than that. So let's get to the how. How have they accumulated so much? They've been doing it for decades. It really ties back to their early history, accumulating land, agriculture, farming, ties back to their early founder, Joseph Smith, and it's something that they've been doing for decades now. What we've noticed with our reporting is that they've been turning land that they've owned for many decades now and starting to look at potential development opportunities in high growth corridors in places like Florida, Colorado, Texas, and Arizona.

3:31Carol Massar:You make the point in the piece, it's not all about building houses of worship or universities, for example. This is about, in some cases, building homes or owning commercial real estate. What is their strategy? Right. So the church says that all of this goes back to funding their humanitarian mission and the church's mission of spreading the gospel. But when we spoke to investors and brokers about the church and how they operated on an investment level, these are for-profit entities that are investing in their commercial real estate, for example. They say they operate more like a sovereign wealth fund than they do a religious institution.

4:05Many of the leaders in the church and in these commercial real estate arms of the church come from big business backgrounds. One of the leaders that we highlight, Ashley Powell, who leads Property Reserve, their real estate investment arm, he's been leading it since 2017, and he comes from real estate backgrounds, firms with executive positions in Deutsche Bank, as well as in BGO, formerly known as Bento Kennedy.

4:31So has come in to lead the church and has significantly grown their assets under management over the past decade. So now they're getting into the politics of building. Basically, that's what they're doing. So talk more about what are some of the critics?

4:45Carol Massar:What are they saying? And then how is the church responding to it? What's their response? Right. I mean, the land that they own is significant, and they're really planning these master plan communities. We're not just saying like dozens of homes, even though that's quite a bit. You know, these are thousands of homes in major cities close to major international airports, it will have an impact on the communities, on traffic, and on the local neighborhoods there. And so some of the concerns we've heard about is that a lot of these lands are on rural land. There's environmental sensitivities, there's traffic sensitivities.

5:14You have some local residents that are concerned about what this type of development will do to infrastructure, to water, to the wildlife corridors that exist in these places. and it's unclear because there isn't a lot of transparency, to be honest, around many of these projects.

5:30Carol Massar:Well, let's talk a little bit about that, the transparency side of this. You make the point, along with Anne in the piece, that you only know what you know, and there are only certain states have disclosure rules. Texas, for example, doesn't have a disclosure rule, so you wouldn't be able to necessarily see what other assets the church owns. How does this fit into their total assets that are under management if we are looking at this like a, you know, sort of sovereign wealth fund, as one source told you. Sure. I mean, it's likely just a small sliver of their total assets. Real estate is just a small sliver.

6:02We are just looking at real estate and what we can know. And like you mentioned, with Texas, they have policies where they don't need to disclose sales prices. So we're not even really tracking their full value of the assets that they own in Texas, which is an area that they are investing in. They also have investments with co-investors, real estate investment firms. We reported that they have investment partnerships with big firms like Affinius Capital, DWS. Those types of investments, we have no clarity into as to how much they're investing in, what types of real estate that they're co-investing in.

6:32And again, this is just real estate. They have several different types of investment arms. You know, obviously one that's very well known is their investment arm Ensign Peak Advisors, which is nonprofit. That one, just according to SEC 13F filings, which only looks at specific types of securities, has over$60 billion.

6:50Carol Massar:Is everything nonprofit because it's a religious organization? Or are some of the entities taxed? No, some of the entities are taxed. The specific ones we are looking at, like Land Reserve, for example, that goes to these master plan communities, are taxed. So all the people who donate 10 % of their income, they have no idea as far as the financials as well, correct? You know, I think there's not too much transparency as to exactly where the money is going. The church obviously invests a lot in building temples and humanitarian work. But there is this other really big arm of, you know, financial reserves and investments that they have that there's not a lot of clarity as to, you know, what they're spending on.

7:31Carol Massar:You know, one thing that I found really fascinating about the piece was the landlord aspect for commercial real estate and what they allow and what they don't allow and how that can get a little challenging for tenants in some cases. Share some examples of that. Right. So one example we had was in the UK, you know, they owned an office building and they wanted to include a clause in their leases that would prevent their tenants from subletting to coffee or alcohol tenants, which, you know, goes against the tenants of their faith. These are just small little crooks that they have. We spoke to the church and they said more generally, you know, it is just about certain restrictions that may come with localities of where they're based in.

8:08And I'm just curious how this story came to be in the first place. Like, what was it that sparked kind of the interest in it? What was that kind of factor that brought it out? And how did you write this story about it? Right. So I first got interested at the end of 2024 because there was some news around the church looking to basically annex a big piece of their Florida ranch land called the Deseret Ranches into the city of Orlando from Orange County. And that was such a massive move that if successful, it would have increased the size of Orlando by roughly 60%. Just think about that scale. Massive.

8:40That didn't end up going through because there was a lot of pushback politically and from residents. But it really made me question how were they able to potentially do something that would be so significant for Orlando, for Florida, and why? And that led us into going into this project to figure out exactly how much they own, what they were planning on doing with these sites, and how it would impact the local communities that they were in.

9:02Carol Massar:What is the strategy based on talking to brokers and those folks who have sold assets to the church? What's their strategy in terms of buying them? I mentioned the part about outbidding a Bill Gates-backed entity, for example. Right. So most commercial real estate investors I speak with may have an investing horizon of 8, 10 years, maybe if you're longer term, 20 to 30. The church invests with a generational view. They're talking 50 to more than 100 years. They are holding it very long term. It's meant to be part of their big financial reserve for when their members need it, potentially in the future and currently.

9:36And so their strategy is people see them as very astute investors. If they like something, they're willing to pay for it because they're looking at it with a completely different generational view than other commercial real estate investors. And especially today with borrowing rates a little higher, they have an upper hand in that they can pay in all cash, and they're willing to pay a little bit more.

9:56Carol Massar:Can you dig a little bit more into the wealth that's come under scrutiny? Because I saw something it said, and SignPeak Investors, a church's nonprofit investment manager, reported more than$60 billion in publicly traded securities in his portfolio, and that's as the end of June. Right, right. And that's only in specific types of securities that's required to be reported in the 13-F filings. That's limited to very specific asset types. There's been a lot of question around the church's transparency around their financial holdings over the past few years. In 2023, They settled with the SEC for$5 million because the SEC alleged that they were using shell companies to basically hide some of their investments and skirt disclosure requirements.

10:35The church didn't admit or deny wrongdoing, but they said they regretted mistakes were made. There was a former investment manager at Ensign Peak Advisors who came out, did a 60-minute interview, and basically called it a clandestine hedge fund that was misleading its members. Again, the church pushed back against that, called it unfounded allegations. But it just goes to show that this lack of transparency has brought to light a lot of questions around the church as well and where it's spending its money and why.

11:05Carol Massar:Someone listening to this might say, wait a second, doesn't the Catholic Church own a ton of land? How is that different than how the Mormon Church does it? The Catholic Church does own a lot of real estate, but it's different in that it's far more decentralized. For the Mormon church, their real estate, whether it's what they own in Hawaii, what they own across different states, it all goes back to Utah. It all goes back to a centralized authority in Utah, whereas the Catholic church is very decentralized. It's not really the Vatican that owns all the real estate in the U.S. It's different dioceses.

11:35It's different religious orders. It's different parishes.

11:38Carol Massar:And so far, most of this is in vast majorities in the United States, even though this is a religion that's growing globally. Our report focuses on the U.S., which is the majority, but they have a lot of real estate that they are doing in the U.K., in Canada, in Australia, in South America as well. Well, Natalie, it's a great story. It is today's big take. It's one of the most read stories on the Bloomberg Terminal. It is all about the impact of the Mormon church quietly expanding its real estate empire. With billions of dollars in land, the institution is investing in more deals and massive projects that stand to reshape communities.

12:13Carol Massar:Check out Natalie's reporting on the Bloomberg Terminal and, of course, at Bloomberg.com.

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