BY STEPHEN O’KEEFE, CFA

Not all of us are ready yet to retire from urban life and spend all our time at our ranches, our beach homes, our hunting lodges, and our lake houses, but there’s no reason for our fields to lie fallow, so to speak. One way or another, there’s money to be made.

By buying stock in a wide range of businesses, you can participate in and profit from the land game without ever stepping foot on a piece of property. There’s the obvious, of course: timber, mining, petroleum, agriculture. But that just scratches the surface. Peek inside for an introduction to the myriad ways you can increase your land portfolio without once getting your hands dirty. As investments go, raw land can be rock solid.

But how can you profit from the increasing demand for ethanol if you don’t already own in the Corn Belt? What’s the best way to catch some upside when millions of acres of timberland are sold off? Simple. Diversify your portfolio. From the nation’s largest private landowner to Colorado’s biggest ski mountain and California’s biggest ranch, these publicly traded securities are all about land.

TRC
Tejon Ranch Company
LEBEC, CA. With more than 270,000 acres, TRC owns the largest expanse of private land in California. The ranch is located approximately 60 miles north of Los Angeles. TRC generates about half of its revenue from real estate operations and the other half from farming. Revenues have grown 10 percent per year since 2003.

PCH
Potlatch Corporation (REIT)
SPPOKANE, WA. PCH owns and manages 1.5 million acres of timberland in Arkansas, Idaho, Minnesota, Wisconsin, and Oregon. This stock converted to a Real Estate Investment Trust (REIT) structure in 2006 and may be best suited to income-oriented investors. PCH reviews its land holdings to see which parcels have high non-tim-berland values and are candidates for sale using the Section 1031 exchange program to minimize capital gains taxes.

PCL
Plum Creek Timber
SEATTLE, WA. Plum Creek has more than 8 million acres in major timber-producing regions of the United States, making it the largest and most geographically diverse private landowner in the nation. Management has acquired hundreds of thousands of acres in the last 15 years and is identifying where sales or development can be made. PCL has an attractive 4 percent yield.

WY
Weyerhauser
TACOMA, WA. An international forest products giant with sales of $21.9 billion in 2006, WY is under pressure to unlock shareholder value by restructuring its timber-lands into a REIT for more favorable tax treatment.

MTN
Vail Resorts
BROOMFIELD, CO. Skier visits were up this year, and so were lift ticket prices. MTN operates numerous ski resorts, including Vail, Breckenridge, Keystone, and Beaver Creek-and has a majority interest in RockResorts. A growing segment for MTN is real estate operations, which contributed less than 10 percent of 2006 earnings but look like a good source of future earnings growth.

SWC
Stillwater Mining Co.
BILLINGS, MT. The recent spike in platinum prices has been a boon to this Montana mining company, which refines and markets palladium, platinum, and associated metals. Both of the company’s mines (Stillwater Mine, near Nye, Montana, and the East Boulder Mine near Big Timber, Montana) are located on the geological formation known as the J-M Reef. Norilsk Nickel owns about 55 percent of shares.

CHK
Chesapeake Energy Corporation
OKLAHOMA CITY, OK. As natural gas goes, so does CHK. The prospects for a rebound in prices have propelled shares of the country’s third largest independent producer. Headquartered in Oklahoma City, the company focuses on exploratory and developmental drilling as well as acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex, and Appalachian Basin.

CWEI
Clayton Williams Energy
MIDLAND, TX. Want to throw in with one of the country’s most successful wildcatters? Clayton Williams Jr. is not your typical oil man. He owns an interest in more than 6,000 oil and gas wells, primarily in Texas, Louisiana, and New Mexico. He’s also made a name for himself as a cattleman and ranks No. 59 on this year’s Land Report 100.

TIN
Temple-Inland Inc.
AUSTIN, TX. The company owns or leases 1.8 million acres of timberland in Texas, Louisiana, Georgia, and Alabama. Pressure from financier Carllcahn is triggering a restructuring plan with TIN retaining its lumber mills and manufacturing and spinning off its Forestar Real Estate Group and its Guaranty Federal division, which has substantial presence in the highly desirable Texas and California markets.

GMTN
Gander Mountain
SAINT PAUL, MN. Like gear? Gander Mountain likes you. The company’s 105 outdoor lifestyle stores in 22 states specialize in hunting, fishing, camping, marine, and outdoor lifestyle products and services. It is poised to open 9 more stores this fall.

ADM
Archer Daniels Midland Company
DECATUR, IL. Eager to cash in on ethanol? Then take a look at this Illinois giant, which was founded in 1902. ADM processes foodstuffs: soybeans, wheat, cocoa, and that new yellow gold-corn. It has good exposure to the growing use of ethanol as a fuel (biodiesel too), but with more than 5 billion gallons of capacity in North America, the additional 4.5 billion gallons of planned construction may put a lid on ethanol’s rising price.

DE
Deere & Company
MOLINE, IL. Here’s another way to ride the ethanol boom. DE has grown from a one-man blacksmith shop in 1837 into a global corporation that now employs approximately 47,000 people. Soaring ethanol prices have spiked demand for equipment from this industry leader.

BTU
Peabody Energy Corporation
ST. LOUIS, MO. Peabody owns a majority interest in mines located throughout most major U.S. coal-producing regions. Transportation bottlenecks have dampened earnings, but rail carriers are increasing capacity, particularly in the western U.S. PS. Thanks to their Australian mines, BTU also has good exposure to the burgeoning China and Pacific Rim markets. Earnings prospects are good.

DEL
Deltic Timber Corp.
EL DORADO, AR. DEL sells its lumber products to truss manufacturers and wholesalers and is a good way to participate in the eventual rebound in homebuilding. The company owns almost 440,000 acres of timberland, primarily in Arkansas and Louisiana, and it also develops real estate in Arkansas.

ICO
International Coal Group
SCOTT DEPOT, WV. ICO has more than 1 billion tons of coal (metallurgical quality and steam) in its reserves and has idled about 1.7 million tons of high-cost production, shifting production focus to lower-cost mines. If oil prices stay high, then coal and ICO should remain attractive.

JOE
The St. Joe Company
JACKSONVILLE, FL. Ever heard of the term snowbird? JOE has. Florida’s largest owner of private land (approximately 800,000 acres) is also one of the state’s largest real estate development companies. Northwest Florida remains an attractive location for retirees, and JOE’s 3-5 year prospects are equally attractive.

RYN
Rayonier (REIT)
JACKSONVILLE, FL. Rayonier is a forest products company that converted to a REIT in 2004. It owns or manages 2.7 million acres of timberland in the United States and New Zealand. Its specialty fibers group products are used in pharmaceuticals, LCD screens, and industrial processes. And thanks to long-term contracts for 80 percent of production, RYN is poised to weather a weak housing market.

WTR
Aqua America Inc.
BRYN MAWR, PA. WTR is the holding company for regulated utilities that provide water and wastewater services to customers in 13 states. The company received rate increases in 2006 and is expected to receive more in 2007, adding to revenues and earnings.

ROAC
Rock of Ages Corporation
GRANITEVILLE, VT. A vertically integrated granite quarrier, manufacturer, and retailer, ROAC has built its business on granite memorials. The company owns and operates 10 active quarry properties and 5 manufacturing and sawing facilities, predominantly in Vermont and Quebec. It also has 81 company-owned stores in 14 states.

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BY JOSEPH GUINTO
PUBLISHED AUGUST 2007

This summer, the group, which consists of former National Park Service rangers and former officials from the U.S. Forest Service and Bureau of Land Management, asked Congress to investigate the financial impact on public lands of damages caused by off-road vehicles. The group also suggested that off-roaders who divert from designated trails be subject to having their hunting and fishing licenses suspended and their vehicles confiscated.
 
Although their concerns are not new, the influence they wield may be. Off-road vehicles have been causing concerns for years, as suburban and ex-urban neighborhoods push into formerly open lands, forcing off-roaders to increasingly turn to the wide-open spaces of public lands and rural, private properties. But many public lands are not equipped to handle the vehicles-trails are poorly marked, if marked at all, and not enough rangers are on hand to guide riders to proper riding places.

That’s where PEER and Rangers for Responsible Recreation want Congress to come in. Calling “reckless” off-roading the “single greatest threat to American landscapes,” they’re hoping to convince lawmakers to account for the damage being done by off-road vehicles to sensitive ecosystems in hopes that it will push Congress to boost funding for protecting public properties.

Off-road riding advocacy groups bemoan PEER’s condemnation of off-roaders but support better trail development and efforts at rider education.  

Congress may already be listening to both sides. The House and Senate have passed funding increases for the U.S. Forest Service’s Trails and Recreation budgets for fiscal year 2008. That’s a key line item. Trails and Recreation are where the Forest Service is getting the money to pay for development of a comprehensive trail system for off-roaders to use. That project, launched in 2005, is to be completed by 2009. It would not only pave proper trails but more clearly mark them as well. This past summer, the House upped the Trails budget by $4.6 million from fiscal 2006. The Senate approved a lesser increase of $2 million. The sides are expected to come together on a compromise increase this fall.

In the meantime, PEER and its group of concerned rangers will keep pushing for more out of Capitol Hill.

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The Nature Conservancy purchased 161,000 acres of Finch Paper Holdings forestlands in New York’s Adirondack Mountains. The $110 million deal, which works out to approximately $683 per acre, was announced on June 18 and includes a 20-year working forest agreement that will ensure the continued harvesting of timber on a large portion of the land and preserve approximately 850 jobs at the Glen Falls mill on the Upper Hudson River.

According to Boston attorney Stephen Small, The Nature Conservancy’s acquisition represents the ongoing rise in acceptance of conservation easements as a tool to ensure both open spaces and continued private use.

“Any deal over 100,000 acres is huge,” says Small, a conservation easement expert who has represented both landowners and conservation groups in benchmark easement projects. “We’re seeing more transactions breaching this size, and I believe it’s a great sign when conservation groups, private interests, and governments are pursuing these kinds of deals. You didn’t see this kind of thing very often just a few years ago.”

The Nature Conservancy says it wants to ensure the land’s biological diversity while maintaining both recreational uses and working forestland uses for the area’s timber-dependent economy. In addition to the working forest agreement, the conservancy will also renew year-to-year recreational leases this fall. Under the deal, The Nature Conservancy will also take responsibility for local taxes. It funded part of the acquisition through loans from the Open Space Conservancy and the John Hancock Life Insurance Co., and it will initiate a major fundraising campaign to offset the purchase price.

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BY JOSEPH GUINTO
PUBLISHED AUGUST 2007

Like most states, Pennsylvania has a decades-old statute that limits the liability of landowners who offer recreational access to their lands at no charge. States began adopting those laws in part to encourage private landowners to make their properties accessible to the public.

But a high-profile 2004 incident in Pennsylvania may have exposed a loophole in most states’ liability protections-a loophole that Pennsylvania lawmakers quickly closed.

Their action was spurred by a jury decision in September 2006 holding Daniel Haas, the owner of a 140-acre orchard in Lehigh County, 10 percent liable for injuries sustained by Casey Burns, a woman who lived nearby. Burns was in her car, in her driveway, when an errant bullet fired by a deer hunter on Haas’ property hit her in the head. Burns was pregnant at the time. She recovered, and the baby was not hurt, but the shooting caused difficulties prior to and during delivery. The case was settled in February of this year, before the jury deliberated on damages.

The jury’s decision prompted dozens of landowners to close their properties to the public. Lawmakers responded by offering an amendment to the state’s Recreational Use of Land and Water Act. It says landowners who open their properties free of charge will not “assume responsibility for or incur liability for any injury to persons or property, wherever such persons or property are located, caused while hunting.”

For now, that wording is unique among state landowner liability laws. But court-watchers say that may not be the case for long.

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