REIT in $102m South Carolina timber deal

The acquisition of 51,700 acres of South Carolina timberlands brings the REIT's total timber holdings to nearly half a million acres.

CatchMark Timber Trust, a real estate investment trust (REIT) focused on forest and timberland will buy 51,700 acres of South Carolina timberland for $101.8 million.

The purchase of the Carolinas Midlands III timberlands brings the New York Stock Exchange-listed REIT’s total acreage in the US South to more than 480,000. The deal is expected to go through by the end of the third quarter.

The property is 70 percent pine with a 52 percent to 48 percent pulpwood to saw timber mix. The acquisition is expected to boost the company’s harvest to between 250,000 and 300,000 tons per year over the next decade.

“Proximity to stable, well-managed mills, including one of the most efficient and highest capacity mills in the US, as well as assumption of an existing long-term supply agreement, provides clarity of future sales volumes,” CatchMark chief executive Jerry Barag said.

Growing investor interest in global timber assets as an inflation hedge and a reliable source of returns have led to a crowded market for timberland, investors have told Agri Investor. This year, Brookfield Timberland declined to extend the deployment period for its $1 billion Timberland Fund V, believing that inflated valuations made an opportunistic deal-by-deal strategy more prudent than a traditional fund structure.

CatchMark Timber Trust, headquartered in Atlanta, Georgia, began operations in 2007 and owns interests in Alabama, Florida, Georgia, Louisiana, North Carolina, South Carolina, Tennessee and Texas.