Timberland Invest...
Follow
Find
54.4K views | +0 today
 
Scooped by Sam Radcliffe
onto Timberland Investment
Scoop.it!

What's in store for the world paper industry in 2013?

What's in store for the world paper industry in 2013? | Timberland Investment | Scoop.it

After a second consecutive year of only 1% growth in 2012, world paper and board demand is predicted to rise 3% in 2013. Accelerating economic growth will be a significant factor in this positive forecast, although we are showing only a modest acceleration. More important will be our assumption that consumer inventories will stabilize, or even rise, as underlying consumption improves. Also, we are expecting that the graphic paper share losses to electronic alternatives will relent to some degree next year. Therefore, growth in global paper and board demand will move closer to the increase in the general economy compared to 2011-2012.

***

The growth engines for the world paper and board industry will continue to be tissue and packaging. World tissue consumption is forecast to increase 4.5% in 2013, or slightly above the annual pace of the previous three years, and will be 6 million tonnes above its 2007 level or 22% higher. Global containerboard demand is predicted to rise 4% in 2013, following 2.5% annual growth in 2011-2012, with the growth relative to 2007 being 23 million tonnes or an 18% gain. Other paper and board usage, led by boxboard and specialty papers, is also expected to advance 4% in 2013, compared to 2% annual increases in 2011-2012. Other paper and board demand will be 9 million tonnes above 2007 in 2013, translating into an 11% rise.


more...
No comment yet.
Timberland Investment
Timber Industry | Deals & Transactions | Investment Rationale | Financial Performance | Investors | Asset Managers
Curated by Sam Radcliffe
Your new post is loading...
Your new post is loading...
Scooped by Sam Radcliffe
Scoop.it!

Sponsored by...

Sponsored by... | Timberland Investment | Scoop.it

Prentiss & Carlisle  is one of the largest timberland asset managers in North America. P&C provides ongoing management services on approximately 1.75 million acres of timberland located in Maine, Michigan, New York, Vermont, Wisconsin, Ontario and Quebec. Nearly every acre under management is certified by the Forest Stewardship Council through either our clients or through P&C itself, which holds FSC certificates for both Forest Management and Chain-of-Custody.


P&C provides turnkey land management from long-range forest planning through on-ground forestry, marketing of forest products, harvesting, transportation, road construction and maintenance, stump-to-mill accounting and reporting, client cash management, administration of third-party relationships, public advocacy/representation and strategic asset planning. P&C also provides specialized consulting services in related areas of expertise:

  • Timber inventory design, execution and analysis
  • G&Y modeling and timber harvest scheduling
  • GIS mapping and data management services
  • Timberland valuations and appraisals
  • Acquisition and disposition due diligence
  • Market studies
  • Timber supply modeling


About this magazine

Our aim is to provide a gathering place for news and opinion about timberland investing. We cover both publicly traded issues including listed timber companies, real estate investment trusts (REIT's), and exchange traded funds (ETF's), and the more private world of institutional investing in timberland. Our focus is on: the rationale for investing in timberland; performance of publicly traded timber investments; timberland deals and transactions; timber supply, demand and prices, and; public policy issues that impact timberland investing. Not interested in all of these topics? You can easily filter the stories by using the Tags button above.


We encourage readers to interact with our site:

  • Click on the Follow  ere, and Scoop.it! will deliver a summary of our new content to your inbox every morning.
  • Alternatively, subscribe to the RSS feed   
  • Click the Share button above or at an individual story to Tweet or post a link on Facebook.
  • Click the Suggest button above to propose content for inclusion in the magazine. If the story is accepted, you will be credited as the source with a link that can drive traffic to your own website, Facebook page, blog, etc.


Some useful links


Stock quotes, news and financial metrics

These links take you to customized Google Finance pages for timber REITS, indexes and other publicly traded companies of interest:


Prentiss & Carlisle newsletters

Quarterly updates on conditions in our operating regions


Timber Mart North 

Lake States price reporting service published by P&C


more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

2015 Housing Starts Outlook and the Sensitivity of Lumber

2015 Housing Starts Outlook and the Sensitivity of Lumber | Timberland Investment | Scoop.it

Looking forward, what do we assume for US housing markets? Forisk’s Housing Starts Outlook combines independent forecasts from professionals in the housing industry. Currently, these include Fannie Mae, Freddie Mac, Mesirow Financial, the National Association of Home Builders (NAHB), The Conference Board, and Wells Fargo, as well as long-term assumptions from the Congressional Budget Office (CBO).


Forisk’s 2015 Base Case peaks at 1.60 million housing starts in 2019 before returning to a long-term trend approaching 1.51 million. For comparison, our August 2014 Base Case peaked at 1.58 million housing starts in 2019.


Overall, Forisk’s housing start projections total 1.176 million for 2015.

***

Three key sources supply most softwood lumber used in the United States: the U.S. South, the Pacific Northwest, and Canadian imports. These three account for 95% of the softwood lumber consumed in the United States. So how we view the capacity and production – the availability and health – of softwood lumber mills in each region critically affects our view of future timber prices and wood costs relative to actual housing starts.


Forisk’s Base Case assumes 1.176 million housing starts in the U.S. This corresponds to an estimated 46.08 billion board feet of softwood lumber consumption, an increase of 7.5% over 2014. If housing starts approach 1.3 million in 2015 instead of 1.2 million (you never know), this would require an additional 1.5-1.8 billion board feet of softwood lumber. To fill this demand, production in the U.S. South, instead of increasing 8.5% would need to grow production over 14% above 2014. Alternately, a slower housing market, one that hovers below 1.1 million housing starts, depresses wood demand and timber price growth.


more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Potlatch Taps Mark Bice to Manage Land Acquisitions and Sales in Southern US

Potlatch Taps Mark Bice to Manage Land Acquisitions and Sales in Southern US | Timberland Investment | Scoop.it
Potlatch Corporation (Nasdaq:PCH) announced today that it has hired Mark Bice as Real Estate and Acquisition Manager effective March 2nd. Bice will be responsible for all Real Estate activity including timberland acquisitions and small parcel sales for the company in Alabama, Arkansas and Mississippi. Bice will be located in Birmingham, Alabama.
"Potlatch is pleased to bring someone on board with such deep knowledge and experience in land transactions in the US Southeast," said Mike Covey, chairman and chief executive officer for Potlatch Corporation. "Timberland acquisition in the US Southeast is a key part of our growth strategy, especially where opportunities exist to 'bolt on' to our recent Alabama and Mississippi acquisitions," added Covey.
Bice comes to us from BTG Pactual Timberland Investment group (formerly Regions Timberland Group), a Timberland Investment Management Organization headquartered in Atlanta, Georgia. Bice is a recognized 30-year plus industry veteran having negotiated and closed over $1 billion in timberland transactions, in the US south as well as other regions in the country. Potlatch purchased 201,000 acres in Alabama and Mississippi in December of 2014. The company believes acquiring timberland in the US Southeast is timely given the expectation that housing starts will continue to increase in the coming years and that incremental volume to meet housing growth will mostly come from southern timber markets.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Prosecutors accuse timber company of deception in efforts to reverse forest fire settlement

Prosecutors accuse timber company of deception in efforts to reverse forest fire settlement | Timberland Investment | Scoop.it
Federal prosecutors in Sacramento accuse the state's largest timber company of deception in its efforts to reverse a $100 million settlement it agreed to pay over a wildfire that destroyed more than 100 square miles of forest in Northern California.

Court papers cited by the Sacramento Bee this week (http://bit.ly/1E9lX4r ) show the government contends Sierra Pacific Industries' efforts to overturn the settlement "lack integrity" and are based on false accusations. Prosecutors claim the company "only pretended to settle" the lawsuit it faced.

Officials have blamed the Shasta County company for the 2007 Moonlight Fire.

Last October, Sierra Pacific filed court papers accusing prosecutors of misconduct and unethical behavior in prosecuting the civil suit and said the settlement should be overturned because of "fraud upon the court."

Prosecutors rejected that claim.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Board to take up forest easements as program is in doubt

Board to take up forest easements as program is in doubt | Timberland Investment | Scoop.it

The second phase of a deal that creates the largest land conservation purchase in Wisconsin history goes before the Natural Resources Board next week at a time when the program's future is in jeopardy.

The Department of Natural Resources is proceeding with plans in northwest Wisconsin to buy a conservation easement on 21,189 acres for $5.6 million.

The measure comes as Gov. Scott Walker is proposing to freeze spending for such land purchases because of rising debt costs.

The DNR said the latest transaction would not be affected because funding comes in the current fiscal year and Walker's proposals would not take effect until July 1, the start of the state's new fiscal year.
***
If the latest deal is approved at a meeting in Madison on Feb. 25, the DNR will have paid a total of $16.9 million for conservation easements on 65,867 acres in Douglas County. The easements will protect the property from development, ensuring it remains open for public use in perpetuity.

The first phase of the deal occurred in May 2012, when the DNR struck an agreement with the Lyme Timber Co. of Hanover, N.H., using funds from the Knowles-Nelson Stewardship Fund.

Lyme Timber, a timberland investment management organization, will continue to own the land and manage it for timber production.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

‘Forest 500’ Ranks Firms’ Deforestation Policies

‘Forest 500’ Ranks Firms’ Deforestation Policies | Timberland Investment | Scoop.it
Only six major companies — Danone, Kao Corp., Nestle, Procter & Gamble, Reckitt Benckiser Group, Unilever and HSBC — and one investor, banking and financial services giant HSBC, have comprehensive policies in place to protect tropical forests, according to Global Canopy Programme.

The tropical forest think tank today launched its Forest 500, which ranks 250 companies, 150 investors and 50 governments’ efforts to remove deforestation from commodity supply chains on a scale of one to five. Together, these 500 control the global supply chains of key “forest risk commodities” such as soya, palm oil, beef, leather, timber, pulp and paper that have an annual trade value of more than $100 billion and are found in more than 50 percent of packaged products in supermarkets.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Tax Reform and the Timber Industry

Tax Reform and the Timber Industry | Timberland Investment | Scoop.it

Here is a list identifying many of the issues under discussion that could affect timber companies, followed by a somewhat more detailed discussion of some of them.


  1. Raise capital gains and dividend tax rates;
  2. Recharacterize timber income as ordinary income, instead of capital gains;
  3. Disqualify timber as real property for REIT qualification purposes;
  4. Eliminate expensing of reforestation expenditures and limit seven-year depreciation to ornamentals;
  5. Eliminate the uniform capitalization (UNICAP) inventory exception for timber; i.e., timber subject to UNICAP inventory rules;
  6. Potentially longer depletion and depreciation periods for cost recovery;
  7. Consistent basis for estate tax and beneficiary; and
  8. Tax built-in capital gains on gifts and bequests of interests in timber property.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Scott Walker's budget restricts DNR review of timber cutting

Scott Walker's budget restricts DNR review of timber cutting | Timberland Investment | Scoop.it
Tens of thousands of acres of tax-subsidized private forest would be logged without state forester oversight of cutting plans under a proposal in Gov. Scott Walker’s budget.

The budget provision was requested by loggers who say state regulation is costly and unneeded because private foresters usually design cutting operations that adequately protect forests, streams and wildlife.

The change would affect the 3.2 million acres of privately held land — one-third of it open for public recreation — that owners have enrolled in the state managed forest program in exchange for lower property taxes.
The 1986 managed forest law requires owners to file 25-to-50-year plans specifying scheduled timber sales and management practices designed to ensure a sustainable supply of wood for industry as well as preservation of wildlife habitat, water quality and certain recreational opportunities.
Walker’s plan would provide owners with automatic state approval when they file timber-cutting notices if they hire a contractor who participates in the Department of Natural Resources cooperating forester program, which mandates minimum educational requirements and an agreement to use sound practices.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

State purchases conservation easement on Iron County forestland

State purchases conservation easement on Iron County forestland | Timberland Investment | Scoop.it
Nearly 14,000 acres of northern Wisconsin forestland will be set aside for timber production and public use in a deal between the state and a nonprofit group.

The Department of Natural Resources used $4.5 million from the Knowles-Nelson Stewardship Fund to purchase a conservation easement on 13,732 acres in Iron County.

The deal, which ranks among the top 10 in state land purchases, was finalized in late December between the DNR and the Conservation Fund, which announced details Monday.

The Conservation Fund is a nonprofit group that buys land, often for a short period, then resells the parcel to a new buyer with a requirement that the land remain protected.

The Conservation Fund purchased the parcel from a Brazilian company last summer. The land had been held by Consolidated Papers for generations before the Wisconsin-based company was sold and the land passed through several owners.

The Twin Lakes Legacy Forest is 89% forested, according to the DNR.

The property in the Towns of Knight and Mercer has six small lakes and three miles of frontage on LeClair and Apple creeks, both Class 1 trout streams.
more...
No comment yet.
Rescooped by Sam Radcliffe from Risk-Adjusted Returns
Scoop.it!

Plum Allocators: A look at Plum Creek's 4Q Conference Call highlights

Plum Allocators: A look at Plum Creek's 4Q Conference Call highlights | Timberland Investment | Scoop.it

Via Jack D Bridges
Sam Radcliffe's insight:

Great comments from Jack Bridges, check his page at http://www.scoop.it/t/risk-adjusted-returns.

more...
Jack D Bridges's curator insight, January 27, 10:12 AM

In keeping with the "Timber is Boring" theme, there were no surprises in Plum's final Q report for investors. But, as usual, it pays to mind the details.


Here are 4 issues worth following from the conference call with Rick Holley--not just for PCL investors, but for anyone who invests in working forests.


1) According to Rick Holley , "Over the past few years, well-managed industrial timberland values have grown, while we have seen the values for rural and recreational lands hold fairly steady. In some regions, these HBU lands continue to offer attractive premiums to the underlying timber value. This is particularly true in the Lake States in New England." 


So, expect Plum to sell or ease more lands in these regions that are not part of the bigger strategic portfolio / picture.


Taking this a step further, what does the private market for quality timberland look like, and how much dry powder is out there to be deployed? 


2) Rick Holley - Chief Executive Officer, Director


"Well, 2014 was a busy year as you all know. I think there over 2 million acres transaction for a little over $2 billion. We are not aware of any transaction in the marketplace now, but there are clearly a lot of buyers and they tend to be institutional buyers.

I think the number one focus tends to be the U.S. South.


He continues...."I think other buyers would look at U.S. South for the same reason we like the U.S. South. It has not experienced recovery and will as we see a broader recovery in the U.S. economy, so I think U.S. South tends to be the focus of most buyers, but a lot of the institutional buyers are looking for a diversified portfolio as well, so there are lands in the Lake States, or lands in the west, particularly Oregon that they are very attracted to, to kind of build out their overall portfolio.


I think there is still quite a bit of capital. I do not know the exact number, but you know $2 billion, $3 billion probably in the side lines at any point in time, so there is ready capital for transactions as they come to market.


3) As several savvy observers have noted, there is a spread right now between the prices fetched by private market sales of timberland, and the values assigned by the public market. Holley also talked about taking advantage of this arbitrage (selling "expensive" lands to TIMOs; buying "cheap" PCL equity with the cash)....if you read nothing else, please see the bold section below.


4) Rick Holley - Chief Executive Officer, Director


"During 2014, we continued Plum Creek tradition of disciplined capital allocation. We sold $65 million of core timberlands at values of nearly $2,400 per acre in the South and $3,750 per acre in Oregon.


We repurchased $50 million hundred $50 per acre in Oregon; we repurchased $50 million of our stock at an average price of $40.21 per share, a compelling discount to our view of the company's underlying value as evidenced by these sales transactions. In doing so, we captured an attractive arbitrage selling at private market value and effectively buying timberlands at a deep discount to intrinsic value to our share repurchase."


This isn't how everyone in the timber world views capital allocation. But, when you're Plum Creek, you have a large dividend to support and banks are throwing cheap debt your way...it certainly makes sense to "capture" this spread, provided the lands are fetching good prices. And, as anyone will tell you, because of QE and hyper-low interest rates, the scramble for yield continues. 


Conclusion:


For PCL shareholders, the big takeaway is this: 2015 should be fairly steady (no dividend hike expected), while Plum focuses on continuing to capture the arbitrage detailed above. Let's leave the issue of log-pricing (pulp very robust due to bad logging conditions, and light mill decks; veneer & saw-timber in most regions, not so much) for another day.


The entire CC can be found, here:


For those who care (or have to care) about the equity market's moves day-to-day, Plum Creek opened down several percent, hit a low of $43.37, and is now trading off less than one percent at $44.50 / share. 


http://stockcharts.com/freecharts/gallery.html?s=pcl


JDB

Scooped by Sam Radcliffe
Scoop.it!

MLPs: The Next Big Thing For Paper Stocks

MLPs: The Next Big Thing For Paper Stocks | Timberland Investment | Scoop.it

Nothing could be more uninteresting than firms that make paper products. After all, toilet paper, cardboard boxes and fax paper aren’t something we really get excited about.
***
However, the paper stocks may be getting a dash of high growth from using certain corporate tax structure typically found in the oil patch – master limited partnerships (MLPs). Sector giant International Paper Co (NYSE:IP) has begun the first steps of formulizing plans to place some of their facilities inside an MLP. If successful, not only would it lead to some large tax-advantaged distributions, but some pretty hefty share gains as well. For investors, the adoption of MLPs by the various paper stocks could be the growth element the boring sector needs to really get moving.

This isn’t the first time that the forestry sector has used “pass-through” corporate structures to enhance returns for investors. I’ve been a big long-term fan of the various timber real estate investment trusts (REITs) and there is one timber company — Pope Resources (NASDAQ:POPE) — that is structured as a MLP. However, this is the first time that paper producers have seriously toyed with the idea of placing various mills inside the tax structure.


The key for the paper stocks is just what kind of assets that can be placed inside the MLP. According to consultants at PricewaterhouseCoopers LLP, the paper companies could adopt an MLP structure if the mills that produce containerboard use only virgin feedstock — trees or wood chips, or only use a maximum of 25% recycled fiber based on annual input weights to produce paper or cardboard. Mills relying too heavily on recycled corrugated boxes aren’t eligible for the MLP structure. The reason is that the IRS clearly defines that in order to use an MLP, an operation must be processing or transporting natural resources.
***
...the use of an MLP would help boost cash flows and earnings at the paper stocks. The incentive distribution rights (IDRs) and tax-advantaged dividends would ultimately help drive the bottom lines at the cardboard producers. As such, the mills will be more highly valued inside a MLP rather than the current corporate structure. That would also allow the sponsoring paper companies to sell additional at higher multiples for various corporate actions — namely big dividends for shareholders. Additionally, using POPE as an example, the paper stocks with timberland holdings could place some of those assets into the MLP as well.


more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Carbon credits: Astoria sees forest through trees

Carbon credits: Astoria sees forest through trees | Timberland Investment | Scoop.it
In an innovative trade-off, Astoria has agreed not to aggressively harvest timber in the Bear Creek watershed over the next decade in return for carbon credits that could help industrial polluters offset carbon-dioxide emissions that contribute to climate change.
The city is partnering with The Climate Trust, a Portland nonprofit that would purchase the carbon credits. Utilities with fossil-fuel driven power plants pay the trust to find projects that offset pollution and meet the requirements of Oregon’s landmark emission standards law.
By committing to a less aggressive timber harvest at Bear Creek, Astoria could receive about $358,750 in carbon credits after expenses this year and about $130,000 annually for the next nine years. The first year has the most significant potential value because it is based on the city’s existing inventory of timber, while the value for the following years is tied to growth.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Land deal protects nearly 5,800 acres in Franklin County

Land deal protects nearly 5,800 acres in Franklin County | Timberland Investment | Scoop.it

A conservation group has finalized a land deal to protect more than 5,700 acres of forestland and stream frontage in Franklin County that also features miles of snowmobile trails.The Trust for Public Land announced Monday that the organization used a $1.28 million grant from the federal Forest Legacy program plus other funding to purchase a conservation easement on 5,774 acres in Madrid Township.


The land, which is owned by Linkletter Timberlands, will continue to be managed for timber but helps create a 77,000-acre block of conservation land in what is known as the High Peaks region. The conservation easement ensures the public will continue to have access to the land for recreation.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Oregon might lose wildfire insurance

Oregon might lose wildfire insurance | Timberland Investment | Scoop.it
Private timberland owners and the state officials charged with protecting those lands are both in the dark over how consecutive bad fire seasons will change the way Oregon pays to fight catastrophic wildfires.

For nearly four decades, Oregon has purchased an insurance policy that kicks in when wildfires are catastrophic. It’s a unique setup similar to car insurance.

The state has paid a premium of around $1 million and a $25 million deductible before the company chips in. The policy has saved the state as much as $46 million since 1973.

With a month left before spring, the only thing that is certain is that the state and landowners most likely will have to pony up if they want the insurance this year, if Oregon gets a policy at all.

The state sent its top forester, Doug Decker, across the Atlantic to meet face to face with brokers from Lloyd’s of London early this month.

Even now, Decker says, the future is uncertain.

“They’ll be asking themselves the question what can they afford to provide, and we’ll be asking the question what can we afford to pay,” Decker said.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Singapore company buys 197K acres of timberland in Southern Oregon

Singapore company buys 197K acres of timberland in Southern Oregon | Timberland Investment | Scoop.it
Editor's note: The price of this transaction has been removed from the original story pending verification.
A Singapore-based investor has purchased a major Southern Oregon timber tract.
Whitefish Cascade Forest Resources LLC secured 197,000 acres in Klamath and Deschutes counties in Oregon's High Desert.
Fidelity National Financial Ventures (NYSE: FNFV) announced the deal on Wednesday. The company said it covered all of the assets of its portfolio company, Cascade Timberlands LLC.
FNFV received a cash distribution of approximately $63 million.
"We are excited to monetize the value of Cascade for our shareholders," said FNF Chairman William P. Foley, II. "We have been owners of Cascade for approximately eight years and believe it is in the best interest of our shareholders to monetize the value of this land at this time and seek another use for this cash in the hopes of maximizing the value of our FNFV assets."
Whitefish Cascade Forest Resources is registered as an Oregon company with a Salem address, but its principal address is in Singapore and its mailing address is in Seattle.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Shrinking timber supply sends B.C. companies on U.S. mill buying spree

Shrinking timber supply sends B.C. companies on U.S. mill buying spree | Timberland Investment | Scoop.it
At first blush, year-end financials and stock prices for B.C.’s largest forest companies would suggest the province’s forestry sector is well on the road to recovery after a decade-long slump.

Interfor Corp. (TSX:IFP), for example, posted record sales of $1.4 billion in 2014 and record production of 2.2 billion board feet.

Stock values and market caps of B.C.’s three largest forestry companies – Interfor, Canfor Corp. (TSX:CFP) and West Fraser Timber Co. Ltd. (TSX:WFT) – have soared since the end of 2011.

Canfor’s share prices have increased almost 180%, West Fraser’s more than 220% and Interfor’s a whopping 410% since the end of 2011. Based on market cap ($6 billion), West Fraser is now B.C.’s seventh-largest publicly traded company.

But that increase in production and stock value is largely attributable to recent acquisitions of sawmills in the U.S., not to a boom in their B.C. operations. In fact, Canfor and Interfor have both closed mills in B.C. in recent years.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Solid Wood: The Rise of Mass Timber Architecture

Solid Wood: The Rise of Mass Timber Architecture | Timberland Investment | Scoop.it
Few books have addressed the use of wood in large, non-residential buildings. While light frame construction and residential resources are common, little has been written about the use of wood in taller, urban, commercial and institutional buildings. Solid Wood presents a survey of new timber architecture around the world to reveal this construction type’s unique appeal and potential. Not surprisingly, enthusiasm for solid wood architecture (also known as mass timber architecture) and engineering is now growing rapidly among a new generation of architects and designers.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Researcher links Ebola to forests

Researcher links Ebola to forests | Timberland Investment | Scoop.it
A University of Minnesota researcher’s recent work may have found a link between deforestation and the ongoing Ebola epidemic.
As large corporations have spent the past two decades cutting down large forested areas in West Africa to make room for plantations, displaced bats — some of which can carry Ebola — have begun moving to those plantations. The people who work on them are then exposed to the disease.
Though researchers disagree on exactly which species of bat was displaced, reports analyzed by University researcher Robert Wallace show that major policy changes in West African countries can promote the emergence of infectious diseases.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Massive Forest Fires Could Be Cooling the Earth

Massive Forest Fires Could Be Cooling the Earth | Timberland Investment | Scoop.it
In a paper which appears in Nature Geoscience this month, a group of ecologists demonstrated that these fires scorching Earth's northernmost forests can, paradoxically, have a chilling effect on our climate. A smoldering blaze kicks up plumes of heat-trapping soot, which eventually settle back to the ground, hastening snowmelt. Combustion also releases carbon dioxide, our planet's most important heat-trapping greenhouse gas. These effects, like the heat from the blaze itself, tend to warm the planet up.

But as wildfires eat through forests, they also expose the ground, and in the far north, that means uncovering snow and ice. The dark, leafy landscape becomes a bright, reflective one. In climate science lingo, reflectivity is called albedo, and it's a critically important factor for determining how much of the sun's energy our planet absorbs. By increasing a landscape's albedo, fires can reflect more of the sun's radiation back to space and cool the climate.

Trees, in other words, affect our climate almost as much as humans do.
more...
Eva Rider's curator insight, February 19, 2:05 AM

amazing - How wonderful that nature is ever moving towards healing and herself through re-balancing. We can help by harmonizing our selves with her.

 

Scooped by Sam Radcliffe
Scoop.it!

AlphaWealth offers timber investment

AlphaWealth offers timber investment | Timberland Investment | Scoop.it
ASSET manager AlphaWealth is offering its clients a direct investment in eucalyptus plantations in KwaZulu-Natal that have offtake agreements with Sappi and other timber processors.

Listed companies such as Sappi, Mondi, York Timber and Masonite have sizeable timber assets on their balance sheets but derive their sales from processing logs into products such as paper, packaging and furniture.

Mirroring trends in countries like the US, AlphaWealth has assembled a portfolio with 6,500ha of mostly eucalyptus plantations, slightly larger than York Timbers’ area dedicated to the species.

AlphaWealth wealth manager Andrew Flavell said last week that the company’s special purpose vehicle was targeting 15% cash-on-cash returns a year. The fund would be geared with some debt while the farmers would retain material stakes in the venture.

"Forestry investments have seen a substantial amount of inflows recently. There is a new Russian-Chinese joint venture that is putting $200m into forestry investment opportunities. Likewise, Harvard University — which has the largest endowment of any academic institution in the world — is making a major push into timber and forestry investment. Of its 11% allocation to natural resources, 80% is focused on forestry assets."
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

ETF Chart of the Day: Timber Talk

ETF Chart of the Day: Timber Talk | Timberland Investment | Scoop.it
WOOD (iShares S&P Global Timber & Forestry, Expense Ratio 0.47%) is the larger of the two alternatives here, with approximately $289 million in assets under management.

The fund invests in thirty six individual equities that operate in the timber and forestry industry, with top four holdings rounding out as follows: PCL (8.27%), WFT (8.11%), WY (8.05%), and RYN (6.91%). PCL, WY, and RYN are technically “REITs” that operate within the timber and forestry industry, while WFT for example is classified as “Paper and Forest Products.”

CUT (Guggenheim Timber, Expense Ratio 0.70%) debuted earlier than WOOD in 2007 instead of 2008 respectively, but has since lost its edge in assets under management comparatively, as the fund currently has about $191 million.

We see twenty eight individual names in the underlying CUT basket, with a mix of U.S. listed equities as well as a handful of ordinary shares listed internationally. Top holdings at the moment are MWV (4.95%), UPM-Kymmene Oyj (4.79%), Oji Holdings Corp. (4.79%), Mondi Ltd. (4.78%), and Smurfit Kappa Group PLC (4.71%).

Neither of these funds trades heavy daily volume typically as WOOD averages about 19,000 shares traded daily while CUT’s ADV is about 44,000 shares. However, based on the respectable asset levels in these funds, it is
evident that investors are using these funds as niche “buy and hold” allocation type strategies.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Bill Peressini Named President Of Hancock Natural Resource Group

Bill Peressini Named President Of Hancock Natural Resource Group | Timberland Investment | Scoop.it
Bill Peressini has been named President of the Hancock Natural Resource Group (HNRG), Chief Executive Officer Dan Christensen said today.

Mr. Peressini, HNRG's Chief Financial Officer, assumes the role of president, previously held by Mr. Christensen, who will remain as CEO. He and Mr. Peressini will jointly lead HNRG moving forward. The appointment is effective immediately. Mr. Peressini will also continue as CFO until September 30, 2015.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Timbervest LLC Sells 19,700 Acres of Timberland Assets from Investment Fund

Timbervest LLC Sells 19,700 Acres of Timberland Assets from Investment Fund | Timberland Investment | Scoop.it

Timbervest LLC, an Atlanta-based company that manages timber-related assets and investments, today announced it sold nearly 20,000 acres of timberland assets in Georgia and Pennsylvania from its Timbervest Partners I (TVP I) investment fund. The combined value of the two transactions totaled $33.9 million.

***

Georgia Property

Timbervest sold approximately 18,500 acres in Stewart County to an institutional timberland investment group. Located on rolling terrain in Southwest Georgia, the property had been efficiently managed for more than seven years by TVP I as a core timberland investment and its superior wood product mix was an attractive characteristic to the buyer.

Pennsylvania Property

Purchased by the fund in 2007, the 1,134 acres in Franklin and Green counties were managed to provide ongoing cash flow from harvesting operations. Due to the tract’s proximity to Michaux State Park, its aesthetics were improved for sale into the higher value recreational property market. The sale was completed at a recreational price point for a conservation-themed institutional investor and demonstrated the validity of the fund’s investment thesis.


Sam Radcliffe's insight:

$1,720 per acre, a typical southern timberland price

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Timberrrr!! Ninth Circuit Chops Down the Tax Court in Estate of Giustina

Timberrrr!! Ninth Circuit Chops Down the Tax Court in Estate of Giustina | Timberland Investment | Scoop.it
In the recent unpublished opinion of Estate of Giustina v. Commissioner,1  the Ninth Circuit reversed a Tax Court opinion dealing with the valuation of a 41.128% limited partnership interest.  The partnership was in the timber business.  As with just about all valuation cases involving a going concern business, the Tax Court looked to different methods of valuation, as well as the different discounts that may be applicable.

In general, the Ninth Circuit held that the Tax Court did not commit reversible error with respect to the various discounts.2  The main issue that the Ninth Circuit reversed and remanded dealt with the Tax Court’s assigning a weighted average to two different valuation methodologies in coming up with its final valuation.3

The Cashflow Method is basically the value of the partnership as a going-concern and assumes that the heirs would continue to operate the partnership as a timber business.  The Asset Method assumes that the heirs would sell all the timberland assets of partnership and distribute the proceeds to the partners.

The Tax Court determined that the value of the partnership using the Cashflow Method was $51.7 million and the value using the Asset Method was $150.7 million.  Rather than pick one of the methodologies as an appropriate value, the Tax Court looked at the “odds” that the heirs would continue to own the partnership as a going concern versus the “odds” that the heirs would agree to sell the timberland assets and distribute the proceeds.

The Tax Court then detailed the difficulty the heirs who wished to liquidate the partnership would have to achieve that result.4  As explained by the Ninth Circuit:

In order for liquidation to occur, we must assume that (1) a hypothetical buyer would somehow obtain admission as a limited partner from the general partners, who have repeatedly emphasized the importance that they place upon continued operation of the partnership; (2) the buyer would then turn around and seek dissolution of the partnership or removal of the general partners who just approved his admission to the partnership; and (3) the buyer would manage to convince at least two (or possibly more) other limited partners to go along, despite the fact that "no limited partner ever asked or ever discussed the sale of an interest." Alternatively, we must assume that the existing limited partners, or their heirs or assigns, owning two-thirds of the partnership, would seek dissolution.

As a result of the difficulty the heirs would have to dissolve the partnership, the Tax Court concluded that there was a 25% likelihood of liquidation of the partnership.  It therefore assigned a 25% weight to the Asset Method valuation and a 75% weight to the valuation of the partnership as a going concern (i.e., the Cashflow Method).  This resulted in an overall value $76,447,143 ((75% x $51,702,857) + (25% x $150,680,000)).

In a very brief opinion, the Ninth Circuit rejected this methodology.  It seems as though the Ninth Circuit did not necessarily have problem with the Tax Court using a weighted average approach, although it is not clear.  As the quote above states, the Ninth Circuit noted the overall difficulty the heirs would have in forming a 2/3rds voting bloc that would be necessary to vote to dissolve. Quoting Estate of Simplot v. Commissioner,5 the Ninth Circuit stated “the Tax Court engaged in ‘imaginary scenarios as to who a purchaser might be, how long the purchaser would be willing to wait without any return on his investment, and what combinations the purchaser might be able to effect.”
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Potlatch's (PCH) CEO Michael Covey on Q4 2014 Results - Earnings Call Transcript

Potlatch's (PCH) CEO Michael Covey on Q4 2014 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Gail Glazerman - UBS
And I guess since you did talk about bolt-ons over time, can you just give a little bit of perspective on what you're seeing in the industrial timberlands market, in terms of both volume as well as valuation?

Michael Covey - Chairman and Chief Executive Officer
Well, last year was pretty active in terms of the number of acres that were sold. I think the single largest transaction was the one that we completed. And there's a couple of smaller deals in the market today in the South. But I think the nature of bolt-on acquisitions for us would be to identify and execute on transactions in Arkansas, Alabama and Mississippi that were more in the 10,000 to 25,000 acre range that we can draw upon our revolver if necessary and enclose those quickly. So that's the nature of our strategy as we referenced bolt-on acquisitions. But I think there's still a lot of money on the sidelines, there's institutional money, it's been there for a while, it's just there's not been a lot for sale.

Gail Glazerman - UBS
And in terms of rural land interest, have you seen any change or development as consumer confidence, employment markets are improving? Are you seeing any more interest in some of those properties than in the recent past?

Eric Cremers - President and Chief Operating Officer
Gail, there hasn't really been, what I would say, a noticeable change from the past. I mean, yes, gas prices have come down and consumer confidence has come up, but this gas price drop just happened very, very recently. And the majority of our land sales are still out in Minnesota. And as you might expect that Minnesota real estate activity that we have is somewhat seasonal. So it hasn't showed up yet, but we're optimistic that it will.

***
Eric Cremers - President and Chief Operating Officer
... a recognition that the Minnesota market is not really a viable timber market for us. We harvest less than, I don't know, 100,000 tons a year and we make less than a $1 million of cash flow in that market. So it's tiny. And you compare that to the real estate values that we're achieving in Minnesota, those real estate values are at many multiples of what the timber value is worth. So this is recognition that those acres in Minnesota, there are now all in one of the real estate buckets.
***
Eric Cremers - President and Chief Operating Officer
Biological growth, sure. In the south, it obviously depends upon the age of the particular stand you're talking about, but it's probably anywhere from 6% to 9% for young trees, they're growing fast. If they're old trees, they're growing slow. And then I would say, if you go up into Idaho, again depending upon the age of tree, it's probably a 3% to 5% kind of growth rate.
***
Mark Weintraub - Buckingham Research
And then lastly, recognizing crystal balls are always cloudy. But a competitor had suggested that, they felt in a 1.2 million housing environment, there would be an acceleration of pricing down in the South. That's not that far from where we are. Do you think we are close to that tipping point? Because you've obviously forecasted flat pricing for pine saw timber in 2015. Do you think we're getting close to a tipping point in your specific markets?

Jerald Richards - Vice President and Chief Financial Officer
Well, I think we're certainly getting closer, and I would say, it's probably a little bit tighter in Alabama and Mississippi than it is in Arkansas. We're not there yet, but you are seeing price moment for sawlogs in the south. I guess that in eight of the 10 states, we're seeing price increases. So I do think it's inevitable. And I don't know if it's 1.1 million, 1.2 million or 1.3 million starts, but certainly we're starting to feel it and see it in some of these markets.


more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Timberland posts highest annual return since 2007

Timberland posts highest annual return since 2007 | Timberland Investment | Scoop.it
The NCREIF Timberland index returned 10.48% in 2014 -- its highest return since 2007. Last year's return consisted of 7.46% price appreciation and 2.86% income return.

NCREIF said the average annual return for the index since 1986 is 12.59%. In the last five and 10 years, the index had annualized returns of 5.8% and 8.3%, respectively.

“Timberland returns remained strong in 2014, with annual appraisals contributing to a sizable bump in fourth-quarter returns. Increasing EBITDDA returns show that timberland managers are capitalizing on the renewed demand for wood in domestic markets,” said Ryan Reddish, chairman of the timberland committee and acquisitions analyst at Forest Investment Associates.
more...
No comment yet.