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Timberland Investment
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CatchMark Timber Trust's (CTT) CEO Jerry Barag on Q3 2014 Results - Earnings Call Transcript

CatchMark Timber Trust's (CTT) CEO Jerry Barag on Q3 2014 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

***
Collin Mings - Raymond James
Just a couple of quick questions here on your deal pipeline I know that you guys talked a little bit about the fact that you don’t have any pending acquisitions, but a couple of months ago you characterized it as being close to $500 million, where does that stand today and just maybe talk a little bit more about the deals you’re seeing and how that pipeline is shaping up going into 2015?

Jerry Barag - President, CEO and Director
The deal pipeline as you accurately categorized, have risen to a point of about $0.5 billion and that was through the summer and most of the third quarter. It has come down quite a bit at this point and we continue to have an active pipeline but the slate of offerings of marketed deals of publically marketed deals have slowed down significantly. And we think it’s a good time for us to take a breather as well given the fast pace of what’s going on at CatchMark during 2014 so far. And so our expectation is that there will be somewhat of a low for the next quarter possibly going into the first quarter of next year and we expect the pipeline to begin picking up again shortly after the beginning of the year and based on conversations we’ve had with potential sellers that seems fairly likely to occur.

***

Collin Mings - Raymond James
And then as a bigger picture question here some of your peers have shifted more to a focus of repurchasing shares versus buying timberland and just again recognizing particularly and given kind of your strategy and how important growth capital is right now but also recognizing your stock as we sit here right now is trading at a pretty meaningful discount to NAV, how do you even think about repurchasing shares is that something that would make sense to you and the Board at this point?

Brian Davis - CFO, Assistant Secretary and Treasurer

Clearly we have discussed it with our Board and we evaluated it and I’m not going to say that there isn’t a share price that we wouldn’t interested to a share purchase program, but at our current level we’re satisfied that the path that we’re on which is to use our capital for accretive acquisitions is really the best long-term use of that capital and we think that the relative fundamentals in the market the acquisition market today and how we’ve been able to deploy the capital will, excuse kind of we will pay dividends going forward into the future and we’re focused on that long-term strategy. And so for right now you haven’t seen us announced a share repurchase program and I wouldn’t expect it to happen in the future unless we start to see some kind of weakness in our share price.

***

Collin Mings - Raymond James
And then just on, maybe about the timberland acquisition environment and the prices that we’re seeing out there right now, kind of been trading [what] sort of ... real discount rate[s] [do] you sense are being used ... across the board as people don’t have acquisitions right now?

Jerry Barag - President, CEO and Director
It seems very acquisition-by-acquisition, I think from a market standpoint my categorization would probably tell you that there is the normal market and I would tell you that we’ve operated in that and which is in
smaller transactions or moderate size transactions and real discount rates there are probably in the 5% to 5.5% range. And then for the last several years you’ve had this market where on large transactions limited
number of large transactions which probably pushed those discount rates a little bit lower just from a supply and demand standpoint there has been a fewer number of those large transactions.

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Time to Buy the Farm?

Time to Buy the Farm? | Timberland Investment | Scoop.it

Investing in farmland and forest tracts is sometimes described as "gold with a coupon"—a hedge against inflation, because land prices tend to rise along with overall inflation, that also pays a steady income. Small investors have access to these markets through publicly traded real-estate investment trusts. Share prices of REITs that buy farm and timber land have dropped in recent weeks, but most of them yield dividends well above the current yields of about 0.95% on the three-year U.S. Treasury note and 2.11% on the seven-year Treasury.


For farms, there are two relatively new REITs.  Gladstone Land  raised $57 million in its January 2013 initial public offering and now owns 6,833 acres on 28 farms in California, Florida, Michigan, Oregon and Arizona, according to securities filings. Its dividend yield was about 5.82% in recent trading.  Farmland Partners, meanwhile, had a $53 million initial public offering in April and owns 41 farms with 23,630 acres in Illinois, Nebraska and Colorado, along with three grain-storage facilities. Its dividend yield is about 0.90%.


Publicly traded timberland REITs have been around longer.
***
Weyerhaeuser converted to a REIT in 2010 and recently completed a spinoff of its home-building division. It is one of the biggest forest-products companies, with seven million acres of timber in the U.S. Weyerhaeuser recently raised its dividend to 29 cents a share from 22 cents; its yield is about 2.80%.


Plum Creek Timber owns 6.7 million acres in the Northwest, Northeast and South—and six wood-product conversion facilities in the Northwest. Its dividend yield is about 4.35%.


Rounding out the biggest timberland REITs are  Potlatch Corp. and  Rayonier, with dividend yields of about 3.20% and 5.78%, respectively.

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A New Rayonier, But The Same Old Problem

A New Rayonier, But The Same Old Problem | Timberland Investment | Scoop.it

For the major publicly-traded timberland owners - a list that includes Rayonier (NYSE:RYN), Plum Creek (NYSE:PCL), Weyerhaeuser (NYSE:WY), Pope Resources (NASDAQ:POPE), and Potlatch (NASDAQ:PCH) - the frustrating wait for a housing-led recovery goes on. Although Rayonier does have a relative advantage to Plum Creek with its larger (as a percentage) weighting to the Pacific Northwest and its New Zealand joint venture, not to mention the absence of wood products operations, the company can do relatively little in the face of persistent weakness in stumpage prices and sluggish demand for HBU real estate.

***

Earlier this year, Rayonier completed the spin-off of Rayonier Advanced Materials (NYSE:RYAM), the company's former specialty cellulose, ethers, and pulp business. Now, Rayonier is effectively a timberland pure-play - owning about 2.1M acres of U.S. timberland, another 200K acres designated as HBU land (to be sold for its real estate value), and more than 300K acres in New Zealand owned through a 65% interest in a joint venture with Matariki that focuses on Radiata pine for Asian export markets.


Unlike Weyerhaeuser and Plum Creek, Rayonier does not have a wood products operation. I'd call that a mixed-to-positive factor for the company. These wood product operations (which manufacture products like lumber, plywood, and engineered structural products) can generate pretty good cash flow when residential building activity picks up, but they typically command lower multiples than timberlands on a "dollar for dollar" basis.
***
Timberland operators are sort of stuck right now - because the equity markets assign a lower per-acre value to timberland acreage than actual real-time private transactions, acquiring more timberland now is a tricky move. Rayonier doesn't really need to acquire more land, particularly since it sold its lower-value Northeast lands in 2013, but adding more higher-value land in areas like the Pacific Northwest wouldn't be terrible. All told, though, Rayonier's best move is just to manage its harvests appropriately, take advantage of new opportunities to sell pulpwood (like for wood fuel pellets), and wait for prices to improve.

Sam Radcliffe's insight:

"Timberland operators are sort of stuck right now - because the equity markets assign a lower per-acre value to timberland acreage than actual real-time private transactions." Where have I heard that before? Oh, that's right, it was the reason Sir James Goldsmith targeted timber companies for hostile takeovers in the 1980's. It was the reason Wall Street pressured timber companies to divest of their timberlands in the late 1990's and early 2000's.


I happen to agree entirely with the observation that equity markets are assigning a lower value than private transactions would bring. Given the amount of institutional dry powder right now, might that suggest the time is ripe for a hostile run at the timber REIT's? The rationale has already played out twice in the last thirty years.

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Jack D Bridges's curator insight, August 26, 2014 1:37 PM

https://www.youtube.com/watch?v=9MiO-2Qnm8M

 

It's a simple question: What if this is as good as it gets? Please apply that to the current state of the housing market (or at least the rate for new construction of single-family homes in the US).

 

We've had artificially low interest rates for how many years now? How many rounds of asset purchases & market operations by the Fed, along with a $4 Trillion balance sheet supporting our financial system? So, where do we go from here, then?

 

I don't mean to imply that the US will never see 1.5M housing starts again. No. I just think it's folly to consider this the baseline case, as many analysts and timber REIT CEOs think. This lot seems to forget the massive credit bubble, and how it disproportionately fed into home construction & the housing market in general (and don't forget the Fannie / Freddie role in supporting the push for homeownership, either). 

 

Now, even if the housing market doesn't catch fire again, what does this mean for timberland owners? Since wood baskets are hyper local, it really depends on where one looks. For the PNW, as long as China / Japan / Korea need fiber, and it remains a desirable place to live, the market dynamics shouldn't change a whole lot. It's a very competitive marketplace--with industrial users, TIMOs, and land conservancies all jockeying for prime land.

 

For the SE, broadly speaking, a slow uptrend or steady annual home starts number might mean more deferred harvests. Or, as Sam Radcliffe keenly observes, it could see large investors in the timber REITs clamor for unlocking value in other ways (M&A). 

 

I'm not so sure Wall Street is keen to pursue hostile take-over & unwinds of such varied assets as the timber REITs. Why? The public / private valuation per acre spread that Sam notes isn't a simple thing to arbitrage. It would take loads of capital--and even more time.

 

Even if one stores value on the stump during the liquidation of hundreds of thousands of acres, such a wave of sales would surely depress prices in the short-to-intermediate term. I suppose the cost savings from downsizing from a public REIT (bye-bye investor relations staff, a huge HR department, etc.), might help--especially if one chops the salaries of those in charge of this mighty unwind.

 

But, the purchase and profitable parsing of a huge timber REIT is beyond what most I-banks are equipped to do these days. Those guys would much rather play stalker to unprofitable start-ups in Palo Alto for a chance at the next hot IPO. Wall Street gets much higher fees for crafting myths and telling tales about unicorns, than it does for selling transparent, sober businesses like forest product concerns. 

 

Thanks again to Mr. Sam Radcliffe (prentissandcarlisle.com) for starting yet another interesting discussion. I'm sure it's one we'll revisit again in the future.

 

JDB

 

 PS. If any bankers happen to read this, and want to pitch buying / unwinding a timber REIT, don't hesitate to get in touch. I'm looking for a job at present, and would be happy to consult on such a massive undertaking. Seriously.

 

 

 

 

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Plum (PCL) Tones it Down-- CEO R. Holley says housing market still "anemic."

Plum (PCL) Tones it Down-- CEO R. Holley says housing market still "anemic." | Timberland Investment | Scoop.it

Via Jack D Bridges
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Jack D Bridges's curator insight, July 29, 2014 12:58 AM

What follows is a quick look at Plum Creek's (PCL) Q2 Conference Call. 

 

On the housing market, Mr. Holley strikes quite a different tone than he did in early 2014. To wit, we'll call this section humble pie.

 

Mr. Holley begins, "The economists have moderated their growth expectations for residential construction this year, in part due to the lackluster activity during the first six months of the year."

 

Holley continues, "As housing demand improves, we expect to see increased lumber demand and increased lumber production and log prices in the U.S. South. However, the overall pace of demand growth in 2014 is not as robust as originally expected and we have moderated our price growth expectations to Southern sawlogs in the second half of 2014.

 

This reduced view of demand / pricing in the US South is why PCL is deferring so much previously planned harvest (500K--1M tons deferred, in fact).


In Holley's own words, "With this in mind, we have chosen to defer a portion of our sawlog harvest to certain other southern micro-markets and as a result we now expect our harvest to be at the low end of our 20 million to 21 million tons harvest range we gave you at the beginning of the year. The great thing about timber is that we are not foregoing this income or cash flow; we are simply delaying its delivery."

 

And, while my thoughts on the SE cabal of optimists are well known, this isn't a bad move for Plum, given their views of the future. I just think we'll see more unscheduled deferrals when the Southern Sawlog revival keeps getting pushed out another year at a time.

 

So, what does Mr. Holley feel is ailing the housing market?

 

Steven Chercover- DA Davidson

Go it. And then finally, would be willing to hazard a guess as why the housing recovery in so anemic; is it lack of lots of labor jobs or policy?

 

Rick Holley - Chief Executive Officer

All the above. We want to learn that from your guys, but no, I think it’s all the above. I just think it’s a jobs thing, it’s a housing formations thing, it’s still tough for young couples to get a mortgage and then they are trying to improve some of that. The outlook for most people and job out don’t feel good to people, so I think it’s why I can come up with a better word; it’s anemic. It’s just kind of, it’s not there yet. So it’s a combination of all the above.

 

And, then Mr. Holley addresses the broader timberland marketplace in the US: 

 

Rick Holley - Chief Executive Officer

There is still at any point in time, two or three or four five transactions in the market place, generally kind of 40,000 to 60,000 acres. A lot of the TMOs are bringing some lands outs of the funds that they’ve had over time and bringing them back to market. So a lot these are in the U.S South and we look at all of them and as the question was asked earlier and the ones that have transacted generally been north of $2,000 an acre and I think it’s justifiable given the productivity, a lot of those properties that they have come to market.

 

I think one of the things that a lot of investors probably, or just even Plum Creek for a long time maybe we are behind on is how productive these lands are with some of the silvicultural treatments that we’ve all put in place over the last couple of decades, and how much cash flow they are going to generate off that productive and then you start to see a better pricing  environment. You can clearly justify our per acre number with a two in front of it.

 

But there’s always a few things in the market place and I think they seemed to get snapped up pretty quickly, so there’s still lot of capital looking at those.

 

Moving onto Rick Holley's thoughts on rural / raw land markets:

 

Rick Holley - Chief Executive Officer

Well, one of the comments that I made in my prepared remarks today was that some of the markets that have been pretty dormant the last several years like Montana have kind of lit up again, so we see a lot more interest in lands in some of those areas. A lot of the buyers are places from like Texas. Some of those market places are looking at Montana now.

 

Clearly we see a lot more recreational interest in the south. Values still aren’t where we expect them to be longer terms, so we’ll be pretty stingy about selling a lot of these higher various properties in the south, but we are starting to see some movement in the market place and prices are starting to recover a bit.

 

But we’re very pleased to see Montana, because it was a great market a number of years ago as you know and it just went to sleep for the last years. It’s awake now, so that’s a positive trend.

 

Wrapping it up:

 

Me again. In keeping with my recent post about the Rodney Dangerfield-like treatment of the Lake States region, the Plum conference call barely even mentioned the northern resources segment at all--excluding the planned Wisconsin divestiture which closed this summer. 

 

Looking at the equity market reaction to Plum's reduced harvest forecast (and lowered profit / revenue for the remainder of 2014), the stock was off about 3% after-hours. The damage should be mitigated by the accretive value of the 500K MWV acreage Plum diluted shareholders to buy.

 

But, it also bears mentioning how many shares of PCL are shorted--some Wall St. types think betting against Plum is a good way to short the housing market. There are better ways to execute this view--and whatever I think about management's housing forecast, I wouldn't want to bet against Plum Creek. Maybe if the equity market ever corrects, it does drop below $40 for a little while. We also know that's the magic number where Mr. Holley starts talking about buying back stock. 

 

Here is the full Plum CC transcript link:

 

http://seekingalpha.com/article/2350265-plum-creek-timber-company-pcl-ceo-rick-holley-discusses-q2-2014-results-earnings-call-transcript?part=single

 

And, what a 10-year chart of Plum Creek equity looks like--

 

http://screencast.com/t/7u9qwBibAbu

 

JDB

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Plum Creek Timber's CEO Discusses Q1 2014 Results - Earnings Call Transcript

Plum Creek Timber's CEO Discusses Q1 2014 Results - Earnings Call Transcript | Timberland Investment | Scoop.it
Plum Creek Timber Company, Inc. (PCL) Q1 2014 Earnings Conference Call April 28, 2014 17:00 ET Executives John Hobbs - Vice President, Investor Relations Rick Holley - Chief Executive Officer David Lambert - Senior Vice Presi

Via Jack D Bridges
Sam Radcliffe's insight:

Be sure to check Jack Bridges' comments here: http://www.scoop.it/t/risk-adjusted-returns

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Jack D Bridges's curator insight, April 29, 2014 12:37 AM

A few brief takeaways from Plum's recent quarter:

 

1) The current mid 900K single family housing start pace for 2014 doesn't phase Mr. Rick Holley. No. He's holding to the 1.1M forecast:

 

"Despite the headwinds of the slowing recovery in housing market, 2014 is shaping up to be a good year for Plum Creek. We expect that the winter weather’s impact on the first quarter will be temporary and will continue to believe that housing will approach the 1.1 million mark this year. The fundamentals of our North American supply-demand thesis are on track." 

 

So, Plum still believes the US is on the path to 1.5M housing starts in several years. None of the analysts asked Mr. Holley if he believes in unicorns, but let me say this: Between betting on 1.5M housing starts or betting on the existence of unicorns...I'd say the unicorns might have it.

 

Why? Account for the huge spike in starts during the credit bubble, then consider what the Fed is doing to manipulate rates and asset prices....no matter what demographics tell you (never mind the equally important household formation), it's folly to forecast such optimism in the face of a very distorted business cycle. 

 

2) Unlike some businesses looking for a convenient excuse for a weak quarter, the historic winter weather actually does impact timber businesses--a lot. Some of this can be made up in Q3 or Q4, but the harsh weather did slow harvests and deliveries to mills across the country. 

 

3) Plum will buy back stock at $40 / share. So, that's a good indication from Mr. Holley where management thinks it's prudent to opportunistically sell assets that are fully priced (PNW acreage, for example), and use the proceeds to put a floor in the equity price.

 

"so you get down around $40 a share, you will see us buy the stock back. We think it’s very compelling to do. I mean clearly at $43 a share, we won’t buy it back, so we just issued at $45, but it clearly makes sense."

 

4) Finally, the part I always jump to in any PCL call: A glance the timberland investment marketplace. UBS analyst Gail Glazerman had this exchange with Rick Holley.

 

Gail Glazerman - UBS

Okay. And just kind of looking at the industrial timberland market, can you just give any sense of what you are seeing I guess there are a couple of large transactions in the South during the quarter are those types of things that you would – that you are looking at and do you feel having just done the acquisition, you would be in the position to pull the trigger and just in general the level of activity and interest that’s out there?

 

Rick Holley - Chief Executive Officer

Yes, again, we look at everything that comes to market and to the right opportunity that we believe it’s accretive to value and cash flow for this company, we have the capability and we would pull the trigger. As you have seen lately as a lot of these 40,000 and 50,000 acre type of transactions in the marketplace, Deltic announced one recently and there was another one by a new company, I forgot the name (It's Catchmark Timber Trust: CTT, Mr. Holley....), but anyway a small a new REIT in the South. So there has been a couple of smaller transactions, but – and we looked at both of those transactions, so we are very familiar with them.

 

Me, again.

So, within the 30M acres that TIMOs now own in the US, expect the 40 to 50K acre deals to be where buyers are looming, with any major deals going forward to remain between TIMOs. Duly noted.

 

Conclusion: I don't expect fireworks on either side of the market for PCL with this report--just as PCL isn't historically nose-bleed expensive, it isn't screaming cheap, either. This writer figures Plum is fairly priced where it trades--and there are far more interesting places to invest in the asset class. 

 

JDB

 

 

 

 

 

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CatchMark Agrees to Acquire Timberlands in Georgia and East Texas for $74 Million

CatchMark Agrees to Acquire Timberlands in Georgia and East Texas for $74 Million | Timberland Investment | Scoop.it

CatchMark Timber Trust, Inc. (NYSE: CTT) announced today an agreement to purchase 36,340 acres of timberland (known as the Waycross-Panola properties) located in Southeast Georgia and East Texas from Hancock Timber Resource Group for approximately $74 million. The transaction, CatchMark's first acquisition since its successful initial underwritten public offering last December, is expected to close during the second quarter and is anticipated to be accretive to cash flow for calendar year 2014.


Transaction highlights include:

  • Under terms of the agreement, CatchMark would acquire approximately 1.45 million tons of merchantable timber inventory and increase the share of higher value chip-n-saw and sawtimber in its product mix. The inventory comprises 84% pine plantations by acreage and 54% sawtimber by tons.
  • The Georgia properties, located near Baxley (Waycross), and the East Texas properties (Panola) combined are expected to add approximately 180,000 to 200,000 tons per year to CatchMark's harvest volumes over the next decade.
  • The Waycross-Panola properties are situated exclusively in the core U.S. South timber region in highly competitive wood markets, accessible to some of the best mill markets in the country, which will diversify CatchMark's customer base.
  • The properties feature above-average productivity characteristics--Waycross, in particular, registers inventory growth rates approximately 50% higher than average U.S. South timberlands.
  • The transaction will be financed through CatchMark's credit facility.
Sam Radcliffe's insight:

Arithmetic: $2,036 per acre, $51 per ton. 

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Chairman Camp’s Proposals Place REITs in the Crosshairs

Chairman Camp’s Proposals Place REITs in the Crosshairs | Timberland Investment | Scoop.it

On February 25, House Ways and Means Committee Chairman David Camp (R.-Mich.) proposed a dramatic overhaul of the U.S. tax code (the Code). While the “Tax Reform Act of 2014,” (the Proposals) contains a number of previously released tax law changes, it also includes an unexpected and unwelcome strike on many public REITs. The general consensus is that the Proposals are unlikely to reach a vote in the House in 2014.

***

The Code requires that at least 75 percent of a REIT’s assets consist of real estate assets, cash and cash items, and at least 75 percent of a REIT’s income be derived from real estate-related sources. Under the Proposals, “real property” would be defined to exclude timber as well as all tangible property with a class life of less than 27.5 years (as defined under the depreciation rules) for purposes of the REIT income and asset tests. This provision would exclude not only timber, but also cell towers, billboards and several other real estate asset classes in which many public REITs are invested today, in many cases comprising their entire portfolios.


The provision removing timber from the definition of “real property” is particularly surprising, because the IRS first confirmed that timber companies can be REIT-qualifying in the early 1970s, and subsequent use of the REIT structure led to a revitalization of the timber industry. The provision applies beginning in 2017 and creates uncertainty for these companies.

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Tax Treatment of 2013 Timber REIT Dividends

Tax Treatment of 2013 Timber REIT Dividends | Timberland Investment | Scoop.it

The IRS Tax code requires real estate investment trusts (REITs) in the United States to pay out at least 90% of their taxable income to shareholders as dividends. In exchange, the IRS does not levy corporate taxes on this REIT income; taxes are paid – once – by shareholders on the dividends. This single-taxation of REIT income represents a key benefit and attraction to investors.


Timberland-owning REITs enjoy an added benefit. Most timber REIT distributions (related to income from the sale of timber) are treated as long-term capital gains and taxed at relatively lower 15% tax rates compared with ordinary dividends (for those in the top 39.6% ordinary income tax bracket, the 2013 capital gains rate is 20%).

*** 

For Plum Creek, Potlatch and Rayonier, 100% of dividends paid in 2013 will be treated as capital gains. For Rayonier shareholders, $1.14 (61.29%) will be treated as ordinary dividends while $0.72 (38.71%) qualify as capital gains. 

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2014 webinars from University of Minnesota

2014 webinars from University of Minnesota | Timberland Investment | Scoop.it
REITs, TIMOs, and changing industrial forestry

Tuesday, January 21 from 9:00-10:00am

How has industrial forestry changed because of the shift in corporate structure? Minnesota industrial forests have seen a large turnover in ownerships in recent years with investment companies purchasing large tracts of Minnesota forestlands. This webinar will and how industrial forestry has changed because of the shift in corporate structure. Samuel J. Radcliffe will explain the changes in ownership and the difference between real estate investment trusts (REITs) and timber investment management organizations (TIMOs).


Speaker:  Samuel J. Radcliffe, Prentiss & Carlisle Management Company

Sam Radcliffe's insight:

Sorry for the shameless promotion ;-)


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Jack D Bridges's curator insight, December 14, 2013 7:50 PM

This will be my first U of Minnesota webinar--and it should be a good one. Put Jan 21 at 9am on the calendar, and get ready to learn! 

This won't be on the agenda, but here is one subject I would ask about: How CALPERs expects to manage a $2B timberland portfolio with a part-time employee? Is it any wonder their performance numbers are lousy (and their portfolio construction seems, well, very Bush-league, considering their over-allocation to the US South).

 

If I could construct a model showing buying $2B worth of Plum Creek which is also heavily weighted below the Mason Dixon (and collecting the 3%+ dividend) versus their returns net of fees, it would be an interesting comparison. The conclusion: There are far better ways to invest in timberland, especially for such a massive buy-side institution.

 

Anyway, please listen in to Mr. Radcliffe's talk on January 21st. It will be an hour well spent. 

JDB

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Reit CatchMark Timber Files IPO Worth Up to $172.5 Million

Reit CatchMark Timber Files IPO Worth Up to $172.5 Million | Timberland Investment | Scoop.it

CatchMark Timber Trust Inc. filed plans for an initial public offering worth up to $172.5 million, as the real-estate investment trust looks to raise proceeds to redeem preferred stock and repay loans.


The REIT owns interests in about 282,000 acres of timberland, located in Alabama and Georgia in an area with a number of pulp, paper and wood products manufacturing facilities. The company generates income and cash flow from the harvest and sale of timber, as well as from non-timber related revenue sources, such as recreational leases.


Upon completion of the IPO, CatchMark said, it believes it would be the only publicly traded REIT that exclusively focuses on timberland ownership and management, without owning other forest products or manufacturing operations.


For the six months ended June 30, revenue soared 57% to $26.2 million, resulting in a narrower net loss for the period.


CatchMark intends to list its shares on the New York Stock Exchange under the symbol CTT.

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Today's 3 Worst Stocks: timber REIT's claim 2 spots

Today's 3 Worst Stocks: timber REIT's claim 2 spots | Timberland Investment | Scoop.it

(May 30th 2013 7:15PM)   After slipping yesterday on fears that the Federal Reserve would temper the pace of bond-buying, Wall Street reversed its position, gaining ground as poor economic indicators made continued Fed intervention more likely. The S&P 500 Index tacked on 6 points, or 0.4%, to end at 1,654. Not only did the following three companies fail to recover from Wednesday's market decline, but they also ended as the three worst performers in the entire 500-company index.


Weyerhaeuser , which also earned a spot on this ignominious list yesterday, fell 2.9% today. Shares in the company -- which grows and harvests trees, as well as provides end-products such as beams, framing products, decking, insulation, rebar, and plywood -- have fallen four of the past five days. As you can imagine, the company is sensitive to changes in the housing market, and with April's pending home sales growth trailing estimates by 1.2%, investors may be concerned with growth expectations.

 

Plum Creek Timber , which, like Weyerhaeuser, is also a REIT with a main focus on -- you guessed it -- timber products, fell 2.5% today. The uber-short-term performance of Plum Creek has also been dismal, with shares slumping more than 8% in the past five days alone. But just last week, shares reached a 52-week high, and why shouldn't they have? A recovery in the housing market is well under way; as the resurgence continues, companies such as Plum Creek Timber and Weyerhaeuser will be there to benefit.

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Zacks Industry Rank Analysis Highlights: Plum Creek Timber and Weyerhaeuser

Zacks Industry Rank Analysis Highlights: Plum Creek Timber and Weyerhaeuser | Timberland Investment | Scoop.it

Sitting just last week at #192 on the Zack's Industry Rank list, strong recent demand for building materials --and upgrades to earnings estimate revisions that followed-- pushed key players in the timber industry back into the spotlight.This week, the Building Products/Wood Industry enjoys a Zack's Industry Rank of #32.


Within the Building Products/Wood Industry of eight companies, there have been 5 recent positive revisions to annual earnings estimates and 0 negative revisions. Positive estimate revisions have been averaging +15%. Admittedly, there are also a couple of sour earnings surprises to report too.

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Plum Creek Timber (NYSE:PCL)


PCL is a Zacks Rank #1 (Strong Buy). It moved up from a hold just last week. This publicly-held timber REIT reports quarterly earnings on April 29, 2013. The lumber, plywood, and medium density fiberboard (MDF) producer offers an annual cash dividend of $1.68 which yields a nice 3.2% return, and showed us a recent +69% Q4 earnings beat. Plum Creek Timber is the second largest private timberland owner in the United States, with approximately 7.8 million acres of timberlands located in 19 states. Their timberlands are well diversified, not only by species mix, but also by age distribution.


Weyerhaeuser Co. (NYSE:WY)


WY is a Zacks Rank #1 (Strong Buy). It was bumped to its #1 rating within the last week. It reports earnings on April 26, 2013. The producer surprised on its Q4 EPS with a +37% beat. Weyerhaeuser Company is principally engaged in growing and harvesting timber; the manufacture, distribution, and sale of forest products; real estate development and construction; and other real estate related activities. Its business segments are timberlands; wood products; pulp, paper and packaging; and real estate and related assets.

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REIT goes shopping for farmland

REIT goes shopping for farmland | Timberland Investment | Scoop.it

An investment firm wants to buy farmland on the West Coast and elsewhere with more than $50 million raised through the initial public offering of its stock.


The Gladstone Land Corp., based in McLean, Va., is launching a real estate investment trust for farmland, a concept that has previously been applied to commercial buildings and timber properties.

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The firm's "sweet spot" for acquisitions will be parcels in the $8 million-$10 million range, Gladstone said. A secondary stock offering is likely to raise funds for further takeovers after the IPO money is spent.


The company is also looking to hire more employees to oversee purchases in California, Oregon and Washington, he said. It's also looking at parcels in Georgia, New Jersey, Michigan and North Carolina.

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The company plans to buy land and then lease it back to farmers who want cash but don't want to take out mortgages, he said. It will pursue such deals with large independent growers and "corporate farms" that already have access to national produce distribution channels.


Most leases will have to be renewed every two to five years, which makes some investors nervous but allows for quicker increases in rents, Gladstone said.

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Timberland Investment Fees and Returns

Timberland Investment Fees and Returns | Timberland Investment | Scoop.it

This post includes excerpts from Forisk’s timberland investment research and Brooks Mendell’s September 2014 presentation at the “Who Will Own the Forest?” conference in Portland, Oregon. The complete presentation is available here.


During the ten-year period from January 2004 through December 2013, annualized returns for timberland investments – both direct ownership (8.4%) and equity plays in public timber REITs (9.4%) – outperformed the broader stock market (5.2% for the S&P 500). Basically, timberland investments provided the desired stability and diversification through a distressing economic cycle.

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The table above includes data from 11 TIMOs covering 11.9 million acres of private timberlands in the United States. The analysis separates commingled funds, which pool investments from multiple investors, from separate accounts, which manage funds from specific institutions separately. The “net” returns subtract all investment management advisory fees, including paid and unpaid performance incentive fees.

 

The implied annual fees are consistent with Forisk analysis of prospectuses and contract structures, which find that TIMO incentive pay representing an “overage” or “carried interest” of 10 to 20% above a hurdle of 7 to 8% nominal is common. In addition, the implied fees are consistent and in line with ranges reported by Mercer at WWOTF for other non-timber asset classes. Specific to timberland, Forisk research found average total fees from 2005 through 2012 of 84 basis points.

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Brookfield Quarterly Research Report on TIMO's vs REIT's

Sam Radcliffe's insight:

Provided by Industry Intelligence

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REITs Retreat Modestly in July, But Still Outperform Broader Market; Timber is Weakest

REITs Retreat Modestly in July, But Still Outperform Broader Market; Timber is Weakest | Timberland Investment | Scoop.it

REITs retreated modestly in July, but still outperformed the broader market as wider macroeconomic concerns set the trend for the month, according to analysts. The total return on the FTSE NAREIT All REITs Index dipped 0.2 percent in July, although the decline was smaller than the 1.4 percent fall in the S&P 500 Index during the same period.

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Infrastructure REITs were among the best performers in July with total returns increasing 2.9 percent. Residential REITs also had a strong showing in July, up 2.4 percent. Timber REITs were among the weakest performers as returns dropped 5.4 percent for the month.

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Technical Talk: Lagging Lumber Prices Hammer Timber Stocks

Technical Talk: Lagging Lumber Prices Hammer Timber Stocks | Timberland Investment | Scoop.it

Astute traders have likely noticed an interesting divergence between the spot price of random-length lumber and the share prices of the major publicly traded timber companies. From the chart below, you’ll notice that the spot futures price of the lumber continuous contract has fallen by 11% since February relative to the 9.30%, 9.26% and 7.89% increases by Plum Creek Timber Co. Inc. REIT (PCL), Rayonier INC. REIT (RYN) and Weyerhaeuser Co. (WY), respectively.
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Lumber prices have been under pressure since early May. Unfortunately for the bulls, the death cross – where the 50-day moving average crossed below the 200-day moving average back in April – has signaled the beginning of a long-term downtrend. The recent close below the swing low of $321.30 suggests that the selling pressure will likely continue in the weeks ahead and perhaps even intensify. Many traders will expect falling lumber prices to negatively impact the profitability and margins of the major timber companies despite recent positive news of an increase in housing starts.
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Weyerhaeuser is one of the largest publicly traded commodity companies in the world. The company grows, harvests and manufactures forest-related products worldwide and is the dominant player in the industry. With a market capitalization of more than $18 billion, strong moves in lumber prices, shifts in housing trends and general supply and demand changes can have a drastic impact on the movement of its share price.
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From a technical perspective, the 200-day moving average has propped up the price over the past 12 months and the recent economic news has sent the price higher. However, given the weak chart of lumber prices, it may be prudent for bullish traders to tighten their stop-loss orders.
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Plum Creek Timber is another major player. The trust owns and manages timberlands in the U.S. and its products include lumber, plywood, fiberboard and related products. Unlike Weyerhaeuser, Plum Creek's 200-day moving average has acted as a strong area of resistance over the past twelve months.
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Mid-cap timber company Rayonier Inc. has the weakest chart; bullish traders should proceed with caution. Its shares are trading at their 200-day moving average, and recent price action suggests that bulls will have trouble overcoming resistance at this level.
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Divergence between the share price of major timber companies and the spot futures price of the lumber continuous contract suggests that bulls should proceed with extreme caution. Strong news regarding housing starts has caused the prices of the timber stocks to increase, but falling lumber prices could start to impact margins and profitability, and as a result, share prices.

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Timberland Values Increase 9.69% In 2013

Timberland Values Increase 9.69% In 2013 | Timberland Investment | Scoop.it

I wrote a similar article to this last year titled "Timberland Values Increase 7.76% in 2012". Again, the data come from a quarterly newsletter from Brookfield Timberlands Management LP, a wholly owned subsidiary of Brookfield Asset Management Inc. (BAM). In it, the company discussed the NCREIF (National Council of Real Estate Investment Fiduciaries) Timberland Index results for 2013. NCREIF is an appraisal-based index. It included both third-party independent appraisals as well as internal appraisals of timberlands purchased for investments. Its members are generally the TIMO (Timberland Investment Management Organizations) community. TIMOs manage privately owned timberland investments. As far as I know, none of the timber REITs are members of NCREIF. Pope Resources (POPE), however, is.


In any case, the results would also reflect on the value of the timberlands owned by the publicly traded timber REITs and companies - Weyerhaeuser (WY), Plum Creek (PCL), Rayonier (RYN), Potlatch (PCH), CatchMark (CTT) and Acadian (OTC:ACAZF). Timberland properties are routinely bought and sold by the TIMOs and timber REITs to and from each other.


For 2013, the total return from timberland investments in the NCREIF index was 9.69%, up from 7.76% in 2012. This is broken down between EBITDDA returns and appreciation returns. Total EBITDDA returns were 2.80% for 2013 versus 2.68% in 2012. Appreciation returns for 2013 were 6.75% compared to 4.97% in 2012. The NCREIF Timberland Index in 2013 was made up of 457 properties totaling 13.6 million acres with a total market value of $23.1 billion.


The Index is further broken down by region.
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The next table applies a weighted average of the NCREIF 2013 returns by region to each company. As you can see, you can assume about an 8.5% appreciation to Plum Creek's land holding in 2013. In like manner, Rayonier's land appreciated 9.4%, Potlatch's 13.9%, Weyerhaeuser's 11.6%, Pope's 17.4%, Acadian's -0.9%, and CatchMark's 7.7%. Of course, these are all approximations.
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Commercial timberland is a very liquid asset. TIMOs have billions of dollars invested and are always in acquisition mode. Most of the REITs and other timber companies are also always in the market. For these reasons, I believe that the NCREIF index is very pertinent and investors in timber stocks should be aware of this.

Sam Radcliffe's insight:

IMO, Tom Kametz made an error in his calculations of land appreciation, by using both the EBITDA and capital appreciation portions of NCREIF total returns. If change in timberland value is the desired metric then only the capital appreciation is relevant.


After I recalculated using only the capital appreciation portion of NCRIEF, the implied change in value of the REIT timberlands is significantly lower: PCL goes from 8.5% to 5.9%, WY 11.6% to 10.3%, PCH 13.9% to 6.7%.

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Seeing the trees, missing the forest

Seeing the trees, missing the forest | Timberland Investment | Scoop.it

If I've learned anything in the last 12 months it's this: Professional investors just don't understand timberland investment. 

 

I could easily spill 5,000 words on the subject, but let's just focus on three brief reasons why. 

 

1) Many wealth managers still prefer liquid, faux-timber investments: The timber REITs (WY, PCL, RYN, PCH, CTT). These vehicles are publicly traded equities--and are highly correlated to the S&P 500. Actual, physical timber assets exhibit a negative correlation to common stocks--which offers real peace of mind when the financial system seizes up in panic about every 7-8 years.

 

It also pays to remember the REIT structure encourages leverage, in order to take a somewhat lumpy business with varied harvests, and pay-out a steady distribution to shareholders. With our current monetary policy (and Wall St. feasting on the Fed's carry), this might not seem like a big deal; let's see how this balance works in a time of "normalized" rates. So, increased debt loads and reliance on Wall St. popularity and sell-side analysts to keep investors interested: You've been warned.

 

2) Timberland is an incredibly hard asset class to generalize about. There are huge differences between continents, regions, wood-baskets, specie mix, HBU values, etc. So, when someone says to me, "the asset class is over-valued," it trips my antennae. Really? You think so, do you? What regions seem over-priced, and why? Because, to say the domestic timber REITs are over-valued is actually quite a different statement altogether...

 

3) The trick is finding inefficiently priced assets--or managers with access to them. And, guess what? Much of the domestic timberland marketplace is probably too efficient, making alpha far harder to come by. So, one needs to look to other markets (or at least niche managers) within the asset class to find growing wood baskets at attractive prices. And, sorry Charlie, these opportunities are not available in liquid, ETF form. 

 

To be fair, not all TIMOs and PE funds are, by default, preferable to listed timberland businesses. But, for sophisticated, accredited investors, with choices--the opportunities in the current marketplace aren't found on an exchange. 


Via Jack D Bridges
Sam Radcliffe's insight:

The above opinion is from Jack D. Bridges who has a great column at http://www.scoop.it/t/risk-adjusted-returns. Check it out.

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Jack D Bridges's curator insight, March 13, 2014 2:06 PM

If I've learned anything in the last 12 months it's this: Professional investors just don't understand timberland investment. 

 

I could easily spill 5,000 words on the subject, but let's just focus on three brief reasons why. 

 

1) Many wealth managers still prefer liquid, faux-timber investments: The timber REITs (WY, PCL, RYN, PCH, CTT). These vehicles are publicly traded equities--and are highly correlated to the S&P 500. Actual, physical timber assets exhibit a negative correlation to common stocks--which offers real peace of mind when the financial system seizes up in panic about every 7-8 years.

 

It also pays to remember the REIT structure encourages leverage, in order to take a somewhat lumpy business with varied harvests, and pay-out a steady distribution to shareholders. With our current monetary policy (and Wall St. feasting on the Fed's carry), this might not seem like a big deal; let's see how this balance works in a time of "normalized" rates. To sum up, leverage, equity correlation, and a reliance on Wall St. with its hyper short-term thinking, in a long-cycle industry. The price of liquidity is steep indeed: You've been warned.

 

2) Timberland is an incredibly hard asset class to generalize about. There are huge differences between continents, regions, wood-baskets, specie growth rates, specie mix, HBU values, etc. So, when someone says to me, "the asset class is over-valued," it trips my antennae. Really? You think so, do you? What regions seem over-priced, and why? Because, to say the domestic timber REITs are over-valued is actually quite a different statement altogether...

 

3) The trick is finding inefficiently priced assets--or managers with access to them. And, guess what? Much of the domestic timberland marketplace is probably too efficient, making alpha far harder to come by. So, one needs to look to other markets (or at least niche managers) within the asset class to find growing wood baskets at attractive prices. And, sorry Charlie, these opportunities are not available in liquid, ETF form. 

 

To be fair, not all TIMOs and PE funds are, by default, preferable to listed timberland businesses. But, for sophisticated, accredited investors with choices--the opportunities in the current marketplace aren't found on an exchange. 

 

JDB

SADIKOU Mouhamed Nassim's curator insight, December 5, 2014 5:25 AM

Les investisseurs professionnels ne comprennent pas les investissements sur Timberland. Nous nous fonderons sur trois brèves raisons.

1- Beaucoup e gestionnaires de fortune préfèrent encore le liquide, les investissements de faux-bois. Ces moyens sont des actions cotés en bourse et sont fortement corrélés à l’indice S & P 500. Les  actifs physiques réels de bois présentent une corrélation négative avec les actions ordinaires qui offrent une véritable tranquillité d’espoir lorsque le système financier panique chaque 7-8 an.

2- Timberland est une classe d’actifs incroyablement difficile à généraliser. Il y a d’énormes différences entre les continents, les régions, bois – paniers, des espèces de composition, les valeurs HBU etc

3- L’artifice, c’est de trouver des actifs libellés inefficaces  ou des gestionnaires ayant accès à eux. Une grande partie du marché intérieur de Timberland est probablement trop efficace.  Il faudra donc se tourner vers d’autres marchés au sein es classe d’actifs pour trouver de plus en plus des pan,oers de bois à des prix attractifs

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CatchMark Timber Trust: The Newest Timber REIT

CatchMark Timber Trust: The Newest Timber REIT | Timberland Investment | Scoop.it

In December, CatchMark Timber Trust, a REIT, held an IPO and is now listed on the New York Stock Exchange under the symbol CTT. CatchMark's market cap is around $310 million, making it a micro-cap. CTT joins WY, PCL, PCH, RYN, POPE, OTC:ACAZF, and DEL in the publicly traded timber sector.


CatchMark originally began life in 2007 as Wells Timber REIT, a private REIT formed by Wells REF, a private investment firm. CTT owns approximately 280,000 acres of timberlands in Georgia and Alabama. Of the 280,000 acres, 32,800 acres are long-term leases. The lands were purchased from MeadWestvaco (MWV), and are tributary to the MWV's mill near Columbus, Georgia.


Along with the purchase came a 20-year fiber supply agreement. The supply agreement covers a minimum of about 54% of CatchMark's timber harvest, although it could, and has gone higher. This puts CTT in a position of being heavily reliant on one customer, MWV. However, if the supply agreement is at market price, which I believe it is, it is not all bad. The pulpwood market in Alabama and Georgia is quite good and in a worst-case scenario, other pulpmills or some of the new pellet mills in the area would quickly absorb the wood now promised to MWV.


At the present time, CTT is suffering from the same problems faced by the other timber REITs who own Southern timberlands, that is mainly the low stumpage prices being paid for southern pine sawtimber. Even so CTT generated positive cash flow in 2012 and 2013 even through earnings were negative. Negative earnings are mainly the result of a high depletion rate due to the land being recently purchased. I have mentioned in previous articles how depletion makes earnings almost meaningless to a timber company. Free cash flow is much more meaningful. Depletion's only real relevance is in tax calculations, but since REITs do not pay taxes, it is even more irrelevant.


CTT is trading for around $13.50 per share and has seen a range of $12.50 to $14.40. They recently declared their first dividend of $0.11 per quarter yielding about 3.3%. This is in line with the other timber REITs. They also recently paid down $80 million of their long-term debt of $132 million with proceeds from the IPO. I estimate their timberlands to be worth $400 to $450 million so a debt load of $52 million should not be much of a problem.

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Timberland Investment Webinar: still time to register

Timberland Investment Webinar: still time to register | Timberland Investment | Scoop.it

REITs, TIMOs, and changing industrial forestry

Tuesday, January 21 from 9:00-10:00am

How has industrial forestry changed because of the shift in corporate structure? Minnesota industrial forests have seen a large turnover in ownerships in recent years with investment companies purchasing large tracts of Minnesota forestlands. This webinar will and how industrial forestry has changed because of the shift in corporate structure. Samuel J. Radcliffe will explain the changes in ownership and the difference between real estate investment trusts (REITs) and timber investment management organizations (TIMOs).


Speaker:  Samuel J. Radcliffe, Prentiss & Carlisle Management Company

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Sam Radcliffe's curator insight, December 14, 2013 7:03 AM

Sorry for the shameless promotion ;-)


Jack D Bridges's curator insight, December 14, 2013 7:50 PM

This will be my first U of Minnesota webinar--and it should be a good one. Put Jan 21 at 9am on the calendar, and get ready to learn! 

This won't be on the agenda, but here is one subject I would ask about: How CALPERs expects to manage a $2B timberland portfolio with a part-time employee? Is it any wonder their performance numbers are lousy (and their portfolio construction seems, well, very Bush-league, considering their over-allocation to the US South).

 

If I could construct a model showing buying $2B worth of Plum Creek which is also heavily weighted below the Mason Dixon (and collecting the 3%+ dividend) versus their returns net of fees, it would be an interesting comparison. The conclusion: There are far better ways to invest in timberland, especially for such a massive buy-side institution.

 

Anyway, please listen in to Mr. Radcliffe's talk on January 21st. It will be an hour well spent. 

JDB

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Timberlands REIT CatchMark Timber Trust sets terms for $150 million IPO

Timberlands REIT CatchMark Timber Trust sets terms for $150 million IPO | Timberland Investment | Scoop.it

CatchMark Timber Trust, a REIT engaged in the ownership and management of timberlands in the US, announced terms for its IPO on Friday. The Norcross, GA-based company plans to raise $150 million by offering 10.5 million shares at a price range of $13.50 to $15.00. At the midpoint of the proposed range, CatchMark would command a fully diluted market value of $334 million. 

CatchMark Timber Trust, which was founded in 2005 and booked $55 million in sales for the 12 months ended September 30, 2013, plans to list on the NYSE under the symbol CTT. Raymond James, Baird and Stifel are the joint bookrunners on the deal.

Sam Radcliffe's insight:

CatchMark Timber Trust, Inc. was formerly known as Wells Timberland REIT, Inc.

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Time For Timber? 25-Year Gain Crushes S&P 500

Time For Timber? 25-Year Gain Crushes S&P 500 | Timberland Investment | Scoop.it

When it comes to commodities, gold and energy typically bubble up as the go-to ways to add some alternative asset class diversification to a portfolio. Thing is, you’re typically in for a feast or famine experience, depending on global demand (for oil) and the global zeitgeist (for gold). - See more at:

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If you’re intrigued by the idea of adding a commodity sleeve to your portfolio, timber is an often overlooked commodity worth consideration. First off, it’s a renewable resource. Can’t say that about gold or (most) energy. It’s also got a flexible harvesting schedule. You can’t keep corn in the ground if prices soften. A benchmark timber index had an annualized gain of more than 12% from 1987 through 2012, compared to the S&P 500’s annual gain of just below 10%.


Coming out of the market low in March 2009, the SPDR Gold Share ETF (GLD) hasn’t been half as productive an alternative investment as the two largest timber ETFs, Guggenheim Timber (CUT), and iShares S&P Global Timber and Forestry (WOOD).

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For a more direct stake, you can take a look at Real Estate Investment Trusts that own forestland. Weyerhaeuser (WY), which converted from a mish-mosh of paper-related business to a full on REIT in 2010, is a major holding in both ETF portfolios. The company just announced it will pay $2.65 billion to buy more land that will increase its Pacific Northwest timber acreage by 33% to more than 6 million acres. (Pacific timber has a faster route to Asian emerging markets than southern timberland.) At the same time, Weyerhaeuser says it’s considering a sale or spinoff of a home-building subsidiary. The net takeaway: it’s doubling down on direct timber ownership and looking to cash out of a main consumer of said timber.

Granted a forward PE ratio north of 20 isn’t exactly a bargain, but that’s well below Weyerhaeuser’s recent highs.

Management announced it plans to finance the deal by issuing more equity and debt. As a little company research shows, Weyerhaeuser’s debt-to-equity ratio is below 1.00; that makes it far more stable than Plum Creek Timber (PCL), but it’s still more leveraged than the other major U.S. timber REIT, Rayonier (RYN), which operates in the Southern states.

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Plum Creek Executive Says Audit Activity Increasing for Timber REITs

Plum Creek Executive Says Audit Activity Increasing for Timber REITs | Timberland Investment | Scoop.it

Paul Stamnes, vice president of tax with Plum Creek Timber Company (NYSE: PCL), joined REIT.com for a video interview at REITWise 2013: NAREIT’s Law, Accounting and Finance Conference in La Quinta, Calif.

Plum Creek is one of the largest land owners in the nation. Stamnes described audit issues surrounding timber REITs. 

“In the last couple of years there has been increased activity, in particular looking at transfer pricing,” he said. “The IRS is really starting to focus on REITs, primarily from the taxable entities, because that’s where the tax dollars are.”

Stamnes explained concerns regarding recreational leasing.

“Recreational leasing is somewhat unique to the timber REIT industry, because timber REITs own a lot of land,” he said. “Clubs engaged in hunting or other activities will lease land from timber companies because our land is generally open to the public when we’re not engaging in forestry activities. The critical tax issue is ensuring that income remains qualified for REIT purposes.”

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Timber REITS: Growing Tall But Will They Be Cut Down?

Timber REITS: Growing Tall But Will They Be Cut Down? | Timberland Investment | Scoop.it

As demand has grown for new homes and the wood products they need, so has investor interest in timber REITs Potlatch, Plumb Creek, Weyerhaeuser and Rayonier.


Shares of Potlatch, Plum Creek and Rayonier recently logged 52-week highs. Weyerhaeuser shares are up 52% from a year ago, but most of its 16% year-to-date gain was logged prior to its first-quarter earnings report on Jan. 25, which was boosted by a one-time land sale.

Shares of all four companies are up 16% to 21% year-to-date with Potlatch on the high end and Weyerhaeuser on the low end of the range.


Some analysts worry that the stocks have gotten ahead of themselves with positive expectations for a continued housing recovery already priced in.


Take Weyerhaeuser. "We've got their earnings doubling from 52 cents to $1.07 this year and $1.34 next year. It's just that (gains) are already priced into the stock," said analyst Steven Chercover of D.A. Davidson.

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