Developer’s Diary: Ute Lake Ranch

A couple of weeks ago my fearless editor and I hitched a ride on a single-engine prop from Denver’s Centennial Airport to Tucumcari, the heart of northeast New Mexico, for a visit to a great new resort development we had been hearing about. Read more

Amendment 4 Would Cut Property Taxes for Florida Landowners

If you’re a registered voter in Florida and a landowner as well, there is an important amendment on this November’s ballot you need to be aware of. Amendment 4 could significantly reduce your tax liability, provided you set aside your land for conservation purposes. Read more

68,000-acre Onyx Ranch in California Sells for $48 million

The Wall Street Journal reports this morning on a huge transaction in California: the 68,000-acre Onyx Ranch in the Sierra Nevada Mountains just outside of Bakersfield sold for $48 million ($705 per acre) to a joint partnership of the CIM Group, a leading urban development group, and Los Angeles-based Renewable Resources Group. Given present credit markets, the acquisition was funded by equity. Read more

JOE Nixes $130 Million Sale

Earlier today Florida’s largest private landowner, The St. Joe Company, announced the cancellation of a major transaction: 67,365 acres for more than $130 million ($1,929 per acre). Here is the press release from the corporate website.

The St. Joe Company (NYSE: JOE) today said that the previously announced contract for the sale of 67,365 acres of non-strategic rural conservation land in Liberty, Jefferson, Gulf, and Franklin Counties has been terminated.  The sale was to have closed in two transactions for a total price of $130.4 million, the first transaction in the fourth quarter of this year and the other in the second quarter of 2009.

“We are now able to return these parcels to the market,” said JOE’s president and CEO Britt Greene.  “While this particular buyer had sought large contiguous conservation acreage, we are now able to offer this acreage in smaller parcels to other interested buyers. With no near-term need for the proceeds, we plan to continue our orderly disposition of these non-strategic assets.”

“We are continuing to execute our strategic plan, while keeping JOE lean and efficient to better withstand these difficult market conditions,” said Greene. “With our strong balance sheet and cash position, we are prepared to withstand this prolonged downturn and will continue to prudently manage our inventory and assets to preserve long-term shareholder value.”

Field Report: Timberland

The following is excerpted from “Market Notes,” a series of interviews in the Fall 2008 issue of The Land Report by Trey Garrison featuring some of the top brokers nationwide. The complete version is available to subscribers.

“Good quality timberland is selling all day long,” says Mike Patten of National Farm & Forestry. Patten has been buying and selling land and timber since the 1970s and knows the territory. According to him, individual buyers ebb and flow according to market conditions, but investors of all stripes—institutional, public, and private—continue to look for deals on timberland.

“There’s strong competition for the tracts ranging from 10,000 to 50,000 acres among the TIMOs (timber investment management organizations), REITs (real estate investment trusts), investors—everyone is all over it. Any large tract gets snapped up real quickly if it’s not cut over. But it has to be realistically priced. There’s going to be some distressed properties or bargains. There are some super buys out there from time to time. But timberland hasn’t been affected by falling prices in other sectors. It’s a great long-term investment no matter what’s happening,” Patten says.

Eroding confidence in other types of real estate is another factor driving the increased wave of investment in timberland. So says Jonathan Burt at LandVest. “There’s an awful lot of money chasing more traditional timberland deals,” Burt says. “They’re shying away from retail and strategies where they sell to Baby Boomers. With all of the perceived risks in real estate, there are still a number of bright spots for land investors to pursue.”

According to Burt, these places include undiscovered and/or emerging markets, places like northern Alabama and eastern Oklahoma. “Right now the real play is timberland. Things that are attractive now are things that can generate cash. Buyers realize that liquidity is something that can come and go. Two years ago they could buy property with the expectation there would be a motivated buyer not too far down the road. Now you have to look at holding things longer, so they want the income opportunity. That’s why timberland is getting sexy again,” Burt says.

Corrections & Amplifications
An earlier version of this article incorrectly stated that Jonathan Burt was a forester and project manager for the Institutional Timberland Group. Mr. Burt is a forester and project manager for LandVest. The Institutional Timberland Group is a division of LandVest. The above article has been corrected.

Sold! Osborne Cattle Company in the Nebraska Sandhills

Hall & Hall’s Denver office just closed on Nebraska’s Osborne Cattle Company. Located outside of Paxton in Keith and Lincoln Counties, the 20,452± deeded acres feature 2½ miles of North Platte River frontage and can run 2,000 mother cows. The ranch had been on the market for approximately 10 months with the price reduced to $11.5 million ($562 per acre). The brokerage would not confirm final sales numbers, but according to Tom Metzger at Hall & Hall, the cow/calf operation was sold to an in-state cattle operator. “Good Sandhills ranches are always in demand,” Metzger said.

Native Americans Harvest the Wind

Each Friday I scan the Escapes section of The New York Times for an urban take on life in the hinterland. But the keeper in today’s Times was not in the Escapes section but in National: Felicity Barringer’s report on how the 29,000 Rosebud Sioux are turning to wind power for economic sustenance. Read more

Not Your Typical Water Hazard

What story broke yesterday and continues to dominate the business press today? Begin by asking yourself which feature adds the most value to a piece of rural or recreational land. As we all know the answer is almost always water. Unfortunately that same valuation strategy doesn’t hold for residential properties, as the Wall Street Journal pointed out in this article titled “Housing Pain Gauge: Nearly 1 in 6 Owners ‘Under Water.’”

Read more

Pinon Canyon: Under Fire Again

Fire destroyed Mack Louden’s century-old Marty Feeds building in Trinidad on September 15. Louden, a local rancher who has been spearheading opposition to Fort Carson’s proposed expansion of the Pinon Canyon Maneuver Site, had insurance on just a portion of the property. As I detailed in this report, the time constraints of his battle with the Army had forced him to shutter his feed store, which he was in the process of selling. Investigators have ruled out arson. Read more

Sold! Oregon’s 42,500-Acre Ochoco Ranch

The heavily timbered Ochoco Ranch, located in Central Oregon just 30 minutes from the red hot market in and around Bend, sold last week to a buyer from Texas who first saw the property at the website of the listing broker, Mason & Morse. Originally listed in 2007 for $48.5 million ($1,143 per acre), the price was subsequently lowered to $42.5 million ($1,000 per acre).

“We listed the Ochoco in April 2007, so it took about 18 months for it to sell,” said Robb Van Pelt, Managing Broker for Mason & Morse Ranch Company. “Properties of this caliber are few and far between, so 18 [months] to two years is the norm. Sell it too quickly, and you know you underpriced it.”

Located in Crook County, Ochoco Ranch features 35 miles of spring fed creeks and 65 mapped springs. It sits adjacent to the Ochoco National Forest and the Lookout Mountain Roadless Management Area along its eastern border and abuts private ranches on the other sides. In addition to the deeded acreage, Ochoco Ranch controls the cutting rights on an adjoining 3,111+/- of private land under a timber for grass trade use agreement.

According to the Mason & Morse website, the property included 42,428 acres of timbered high country in one contiguous block. Distinctive elements include: no public access; a high percentage of forested lands; smooth, gently rolling terrain with deep soils allowing the ranch to be very usable and productive; very secure, easily controlled and inexpensive to operate.

Among the possible uses for the property were:

1) A private and secure retreat for family/business recreation purposes, possibly incorporating a conservation strategy for tax savings benefit.

2) A buy-and-hold strategy allowing the value of the land and timber to continue growing.

3) Splitting the property into 4 to 10 smaller ranch properties for resale.

4) Developing a small area into a clustered development with “common access” to keep the remainder a large, open, natural property protected by a conservation easement.

5) A resort overlay designation for a world class destination involving mountain recreation.

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