One report, Strategic Factors Driving Timberland Ownership Changes in the U.S. South, documents the extent, reasons for, location, and nature of forest industry land transactions to non-industrial ownership. According to the report, more than half of the 37 million acres of timberland owned by forest industry was sold to institutional investors, such as Timber Investment Management Organizations (TIMOs). Primary reasons for divestiture include poor stock performance, the need to increase shareholder returns, debt reduction, increased tax efficiencies though Real Estate Investment Trusts and sub-chapter S Corporations, and the development of tax strategies that minimize capital gains.
"It is our expectation that these types of timberland divestitures will continue for a long time," said Michael Clutter, project coordinator and professor of forest finance at the University of Georgia-Warnell School of Forest Resources. He continued, "In fact, our study indicates that in three years' time it's possible there will be only one forest products company with timberland holdings exceeding one million acres in the U.S. South."
Likewise, The U.S. South's Timber Sector in 2005: a Prospective Analysis of Recent Change report captured significant forces of change driving markets for timber production across the South. The report shows a steep decline over the past 10 years in international demand for U.S timber products. Industry consolidations, landownership changes, and depreciation and closure of older processing fac
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Contact: David Wear
dwear@fs.fed.us
919-549-4011
Southern Research Station - USDA Forest Service
9-Dec-2005