Timberland Investment
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Austin’s Forestar Group sells off $100 million in timberland

Austin’s Forestar Group sells off $100 million in timberland | Timberland Investment | Scoop.it
Austin-based Forestar Group is selling more than 58,000 acres of timberland in Georgia and Alabama in a deal that should net the company more than $100 million, according to a Tuesday securities filing.

The company – through its subsidiaries — has agreed to three separate timberland sales, according to filings with the U.S. Securities and Exchange Commission.

Those deals are:

*The sale of 26,319 acres in Georgia to SPP Land for $43.426 million.

*The sale of 12,043 acres in Georgia and Alabama to an investment fund managed by Timberland Investment Resources, LLC for $23.73 million.

* The sale of 20,143 acres in Georgia to a different investment fund managed by Timberland Investment Resources, LLC for $37.42 million.

The company said the three transactions should close in the fourth quarter, and would combine to net it $104.58 million.

Forestar Group, which was spun off from the former Temple-Inland Inc. in 2007, operates in real estate and other natural resources and has interests in dozens of residential and mixed-use real estate projects.

The company said in April that it would sell off some of its non-core investments as part of a plan to address shareholder concerns. Last week, the company said that in the past year it has sold off $425 million in non-core assets and reduced its outstanding debt by more than $320 million.
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Forestar Group Inc. Reports First Quarter 2012 Results

Forestar Group Inc. Reports First Quarter 2012 Results | Timberland Investment | Scoop.it

First quarter 2012 fiber resources segment earnings declined compared with first quarter 2011 principally due to reduced harvest volumes associated with the sale of over 74,000 acres of timberland since first quarter 2011. Recreational leasing activity remained strong during first quarter, with almost 99% of available land leased for recreation.

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Rich Assets, Cheap Shares

Rich Assets, Cheap Shares | Timberland Investment | Scoop.it

Forestar Group boasts a rich portfolio of assets and businesses, including 136,000 acres of real estate, mostly in Texas; 752,000 acres of oil and gas properties; 1.5 million acres of water rights; and 275,000 acres of timberland. Yet the company trades for just a fraction of its net asset value, as investors don't quite know what to make of this diverse mix.


Peter Martin, an analyst at JMP Securities, believes the shares are trading at a 40% discount to net asset value, which he puts at $18 to $43 a share. Forestar's shares (ticker: FOR) closed on Friday at $17.56, or 1.2 times book value. The midpoint of Martin's range is $30 a share.

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A legacy timber business in Georgia produces fiber that Forestar sells primarily to Temple-Inland, its previous owner. Forestar was spun off from Temple Inland, now part of International Paper (IP), in 2007.

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