It’s amazing – the yarns that can be shared about certain tracts of real property. Our April Newsletter takes a closer at several standout stories, including one that I am quite confident is destined to end up before the Supreme Court in a year or two. Why? The two states involved have been disputing their boundary for only the last 195 years.
Also in our April Newsletter you’ll find the story of an Oregon Senator who is considering a shift in federal management of certain timberlands. Meanwhile the Texas Legislature is currently embroiled in how best to combat the drought that has plagued much of the Lone Star State.
Last but not least, an uptick in the housing market has brought renewed activity to North American forests. Learn more as one of America’s largest landowners gears up for increased lumber sales.
JANUARY 3 UPDATE:
In late December, a deal was struck to sell the 80,200 acres of timberland in northern Wisconsin for $42.9 million dollars to two companies that manage timberland throughout the U.S.
According to LandVest, Inc. broker David Speirs, the Lyme Timber Company, which is based in Hanover, New Hampshire, has an agreement to purchase 72,800 acres. The Forestland Group, headquartered in Chapel Hill, North Carolina, is set to purchase the remaining 7,400 acres.
NOVEMBER 17 POST:
The Wausau Paper Timberlands offer approximately 80,000 acres of prime timberland located throughout the northern half of the state of Wisconsin. A leading producer of fine printing and writing papers, towel and tissue products, and specialty papers, Wausau has been divesting non-strategic timber holdings since 2005. Most of these 80,000 acres have been sustainably managed by Wausau since the 1940s for the production of wood fiber.
The acreage consists primarily of natural and planted northern pine species. In addition to timber value, the acreage offers an extensive number of land uses, including recreational and conservation opportunities.
Selected from what is undeniably one the finest White pine ownerships in the Northeast, Chadbourne Tree Farms is a 2,470-acre portfolio located in Western Maine near Bethel. The property consists of six tracts ranging in size from 111 to 687 acres, all well-stocked with timber. Collectively, it boasts an impressive 17,407 MBF of saw timber, more than half of which is white pine.
Total stocking averages 29 cords per forested acre, with over 40% of the sawtimber volume in trees 18” DBH and larger. In addition to its superb timber resource, the portfolio includes nearly three and a half miles of water frontage, most notably a mile and a half stretch along a pristine 155-acre cold water trout pond. This superior timberland investment opportunity is poised for strong performance well into the future.
For the first time in two decades, the 11,292±-acre Kahn Timberlands are coming on the market. Located in Northern California, these holdings contain over 142 million board feet of mature redwood and Douglas fir. The sealed bid auction will be conducted by Realty Marketing/Northwest. Bids are due no later than five p.m. July 12.
“The Kahn Timberlands contain some of the most well-managed lands we have ever put on the market, and will be offered so that adjoining owners, mill operators, timber investment management organizations, and other investors can participate in the bidding process,” said Realty Marketing/Northwest President John Rosenthal.
These well-managed North Coast timberlands, located in Del Norte, Humboldt and Trinity Counties, have been managed to create short-term cash flow and long-term growth. The properties are strategically located with access to competitive log markets responsible for processing 50 percent of California’s entire sawmill production. The individual tracts range in size from 40± to 2,739± acres, with most containing approved Timber Harvest Plans. Eureka-based Able Forestry has managed these properties for 25 years.
The Auction Catalog #1105, with Terms and Conditions of Sale, is available by contacting Realty Marketing/Northwest’s office at 800-845-3524 or online at www.rmnw-auctions.com.
For additional information contact:
John Rosenthal, President
Those are the dates of the 9th Annual North American Timberland Investment Summit, which will be held this year in Vancouver, British Columbia. The conference brings together a comprehensive lineup of key players in the timberland investments value chain including pension funds, hedge funds, endowments, family offices, TIMOs, REITs, forestry management companies, law firms, and banks.
Attendees will will get critical regulatory updates and environmental updates on opportunities beyond traditional demand for housing and paper products and learn the latest developments in the use of timber resources for biomass and carbon credit investing.
For more information on the North America Timerland Investment Summit, click HERE.
In one of the largest conservation purchases to date, Plum Creek (PCL) completed the sale of a huge swath of Western Montana to the U.S. Forest Service and Montana’s Fish, Wildlife and Parks Department. Swiss philanthropist Hansjorg Wyss jump-started the deal with a $25 million donation that he subsequently upped to $35 million. Other funding sources included the State of Montana, which contributed $65 million, and the Department of Agriculture, whose $250 million expenditure was arranged by Sen. Max Baucus.
Foreign investors own an interest in 21.2 million acres of U.S. forest and farmland, an amount that equates to just under 1 percent of all the land in the U.S. Every one of the 50 states as well as Puerto Rico has foreign ownership, but far and away the largest concentration was in Maine with 3,323,846 acres (16 percent of the national total). Forest and timberland accounted for more than 3 million of those acres with Canadian companies the leading landowners.
The figures were compiled by the Farm Service Agency from filings required by the Agricultural Foreign Investment Disclosure Act of 1978 and are available in this handy 178-page report.
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.
Q: What effect do you think the continued weakening of the value of U.S. dollar will have on Texas rural property prices/values? Will they hold their own by becoming more attractive to foreign investors – and/or as a safe haven as a tangible asset for U.S. investors – or will they begin to lose value because of the weakening housing market and its ripple effect on the economy? Read more
Regional Spotlight: New England Timberland
Looking to get into the New England timberland market? Check out out our market report inside. Read more